Blencowe Resources
Plc
("Blencowe" or the
"Company")
Annual Results for the year
ended 30 September 2024
And
Notice of Annual
General Meeting
Blencowe Resources Plc, the natural resources
company focused on the development of the Orom-Cross Graphite
Project in Uganda, is pleased to announce its audited financial
results for the year ended 30 September 2024 (the "Annual
Report") and it's notice of Annual General Meeting
("Notice of AGM").
The Annual Report which includes an unqualified
audit report and audited Financial Statement for the year ended 30
September 2024 & The Notice of AGM and
the associated Form of Proxy will be made available on
the Company's website at www.blencoweresourcesplc.com.
Hard copies will be posted to the Company's
shareholders.
For further information, please contact:
Chief Executive Officer's Statement for
the period ended 30 September 2024
Shareholders and Stakeholders,
As we continue this journey to unlock the
enormous value within the Orom-Cross graphite project I am pleased
to share with you some of the progress we have made over the last
12 months.
Graphite remains an integral part of the global
energy transition due to its non-replaceable role within the
lithium-ion battery that stores all renewable energy. There are
many other commercial applications for graphite through its primary
qualities, being high heat resistance and high conductivity, but it
is the role within batteries that most analysts are forecasting
accelerated growth ahead, as the world moves away from fossil
fuels.
Whilst some analysts consider this energy
transition "yesterday's news" due to a perceived slow-down in
demand for electric vehicles, we do not agree. In fact, we'd
suggest the transition has not even yet begun in earnest, and
graphite as a critical mineral will very definitely have its day in
the sun; particularly as we do not envisage most other graphite
projects making it through to production status ahead. This
will ultimately create a demand-supply imbalance and a huge
opportunity for those projects that do ultimately mine and process
graphite and sell it into voracious world markets.
We therefore remain bullish for the future, and
our efforts over the past 12 months have largely been focussed on
how we complete the Orom-Cross Definitive Feasibility Study (DFS)
as the main requirement prior to decision to mine, project funding,
and ultimately production.
The DFS has three key elements within: firstly,
all mining, plant and infrastructure requirements at site, secondly
securing offtaker partners to sign sales agreements, and thirdly
funding - both short term (to complete the DFS itself) and long
term (to fund the project). All these elements carry equal
weight and are critical to the successful completion of the
study.
Together with our lead partner, CMC Engineering,
our team has defined all requirements at site and we are
significantly advanced through the process of design works,
identifying plant and equipment suppliers, considering various
Engineering, Procurement and Construction (EPC) and other
contractors necessary to build the project, and costing
everything. What is emerging is that Orom-Cross will be one
of the lowest cost (both operating and capital costs) graphite
projects worldwide, which will be a significant achievement
and a huge boost to ultimately bring the mine into
production.
The process of getting our end-products
qualified in the graphite market, with resultant ability to engage
and ultimately sign offtake contracts, is challenging. We had
two options, to either build our own pilot testing facility on-site
to showcase end-products to the Original Equipment Manufacturers
(OEMs), or to use existing pilot testing facilities elsewhere (a
more cost-effective route). We chose the latter and after
sending 600 tonnes of raw material to China in early 2024 we
delivered circa 30 tonnes of concentrate, and ultimately 7-8 tonnes
of purified SPG (spheronised purified graphite) which is the
end-product that goes into the lithium-ion battery. This
end-product is now being tested at various OEM facilities as the
final step before offtake discussions. To date all testing
has been positive and we are confident we will emerge from this
process with tier one partiers with whom we will sell product into
ahead. This qualification has taken other graphite peers up
to 4 years to complete and we can be proud of the fact we have
largely completed this exercise in just 18 months.
Blencowe announced its first offtake MOU for
large flake concentrate in mid-2024 and we anticipate others to
follow shortly. What is emerging is that Orom-Cross can
deliver some of the highest quality graphite worldwide, which bodes
well for future sales relationships as quality is paramount in this
industry. We will finalise all bulk sample testing shortly
and move MOUs into offtake agreements in 2025.
The third key DFS activity is funding, and we
continue to build strong funding relationships that are ultimately
the foundation of successful implementation. As previously
reported, Blencowe received a US$5 million technical assistance
grant from the US Government, via their private sector lending arm
the Development Finance Corporation (DFC), and to date US$3.5M of
this grant has been disbursed to Blencowe. This support has
been critical, and aside from the credibility our relationship with
DFC provides we are confident this tier one financial institution
will play a cornerstone role in the overall funding solution for
Orom-Cross implementation. Other financial institutions have
also engaged with us and we are building a strong base upon which
we can be confident will ultimately bear fruit, and deliver the
substantial capital requirement to build our mining
project.
Most recently Blencowe was awarded full
accreditation by the Minerals Security Partnership (MSP) which is
an influential body formed by 14 of the largest economies in the
world, designed to support mining projects that might address the
critical minerals supply issues that the world faces. This is
very prestigious as accreditation has only been awarded to a select
few projects worldwide and it now puts Orom-Cross on many
radars. Whilst this relationship is still in its early stage
we are confident this will bring in further support for Orom-Cross
ahead as the MSP grows in stature.
Blencowe is emerging as a unique,
differentiated mining and processing strategy and over the past
year considerable effort has been placed on building a relationship
with experienced parties that can assist the Company to move into
the downstream processing part of the graphite cycle. This is
where the most substantial profits are made in this industry.
In September 2024 Blencowe announced a partnership that has been
formed with one of the most significant SPG producers in the world,
which paves the way for this downstream beneficiation strategy to
play out. The plan is to jointly build an SPG facility near
to Orom-Cross to become an offtaker for life of mine, to
beneficiate the concentrate and sell purified graphite products
into world markets. This would be some of the first purified
graphite produced outside of China and would likely deliver a
premium as OEMs are seeking this product delivered ex-China to
reduce their risk exposure. A downstream SPG facility DFS is
underway to assess the full commercial outcome of this strategy and
it is anticipated that this standalone DFS will be completed in
parallel with the Orom-Cross DFS to assess both projects together
as they are intertwined.
As can be seen this has been another busy year
and the DFS continues to keep the management team occupied.
Despite many challenges in the macro-market Blencowe has managed to
keep the project moving forward and hopes to complete the DFS
around mid-2025. Every way by which we can add further value
is being considered and other exciting relationships and
initiatives will emerge as progress continues.
We continue to build and deepen relationships
within Uganda and we appreciate all the support given to us by
parties within that country, at all levels.
I would particularly like to applaud our
operational management team, led by COO Iain Wearing, and our
Ugandan team, led by our Country General Manager Nabil Alam. They
have been doing a fantastic job and continue to do so.
I would also like to thank our shareholders
and the wider market for your support, and in particular our major
shareholders who have stuck by us through what have been difficult
market conditions. We offer a unique and differentiated strategy
and a graphite project which is the envy of many. We hope that we
can continue to justify your faith and your investment in all we do
moving forward.
Mike Ralston
Chief Executive officer
30 January 2025
Strategic Report for the year ended 30
September 2024
The Directors present the Strategic Report for
the year ended 30 September 2024.
Results
The results are set out in the Consolidated
Statements of Comprehensive Income on page 29. The total
comprehensive loss attributable to the equity holders
of the Group for the year was £902,801 (2023:
£1,366,685).
The Group paid no distribution or dividends
during the year (2023: Nil).
Business model, review of the business and future
developments
The Group's principal activity is the
exploration of Orom-Cross Graphite Project in Northern Uganda,
which it owns through its 100% subsidiary Consolidated African
Resources Limited 'CARU'. Blencowe also has a 100% owned
subsidiary, Blencowe Battery Mines Uganda- SMC Limited which is a
dormant Company.
The Group's aim is to create value for
shareholders through the discovery and development of economic
mineral deposits. The Group's strategy is to continue to progress
the development of its existing project in Uganda and to evaluate
its existing and new mineral resource opportunities.
The Group's business is directed by the Board
and is managed on a day-to-day basis by the Executive Chairman,
Cameron Pearce. The Board monitors compliance with objectives and
policies of the Group through performance reporting, budget updates
and periodic operational reviews.
Key performance indicators (KPIs)
Financial KPIs
Results for the year
With no income in the year the Group continues
to monitor the loss before tax to ensure the continued viability of
the Group and ability to continue to develop the Orom-Cross
Graphite Project. The Group has made a loss before tax of £961,941
for the year ended 30 September 2024 (2023: loss before tax of
£1,397,967).
Exploration expenditure - funding
and development costs
At this stage in the Group's development, the
Group is focusing on financing and continued development of the
Orom-Cross Graphite Project.
Therefore, the funding and development costs of Orom-Cross Graphite
project have been chosen as Key Performance Indicators.
The Group incurred £2,846,130 (2023:
£1,450,063) of capitalised exploration costs. These exploration
costs are in line with the Board expectations.
In 2024 the Group raised funds of £825,023 net
of issue costs (2023: £1,313,820) from the equity markets. This
amount was used to pay for the continued development of the
Orom-Cross Graphite project and other working capital costs.
Please see note 20 for events after the year end.
At 30 September 2024 the Group had a cash
balance of £114,694 (2023: £129,853).
Employees
There were two employees during the year apart
from the directors, the Chief Executive Officer ("CEO") and the
Chief Operating Officer ("COO"), who are the key management
personnel. All current members of the Board and the key management
personnel are males. For more information about the Group's key
management personnel see note 7.
Social, Community and Human Rights Issues
The Orom-Cross Graphite Project is still at an
early stage of project development and further consideration will
need to be given to social, community and human rights issues
affecting the Project. Currently a key consideration is that under
Ugandan law the Company is required to rehabilitate the area
affected by the mining activities. Accordingly, there will be a
potential cost associated with undertaking this obligation. At this
time, although the Group continues to explore and test the
minerals, the land has not been affected and therefore the Group
has not accounted for any costs associated with the rehabilitation
of the area.
On 10 September 2022 CARU signed a revised
agreement with the local communal land association of Locomo
village for the land surface rights and has agreed to help provide
local education and sensitisation of the local communities in
Akurumo parish on the opportunities and advantages of mining
graphite. CARU will give employment priorities to the local capable
members of Akurumo parish.
Since the acquisition of CARU the Group has
donated to local causes, such as a scholarship programme. In
February 2024 the group donated to the local school, supplies of
notebooks, stationery supplies and sporting equipment to assist
students at the start of the new school year. As a part of the
activities to define the water resources required for the project,
the company undertook to refurbish three (3) bores within the local
community , and to install new solar power supply, off take points
and pumps as well as infrastructure to install a water supply to
the local school and community health clinic. The Group will
continue to donate to the local communities around
the region of Uganda in which the Project
Licences are located.
Principal risks and uncertainties and risk
management
The Group operates in an uncertain
environment and is subject to a number of risk factors. The
Directors have carried out a robust assessment on the principal
risks facing the Group, including those that threaten its business
model, future performance, solvency or liquidity.
The Group continues to monitor the
principal risks and uncertainties with the help of specialists to
ensure that any emerging risk are identified, managed and
mitigated. There has been no significant impact to the Group from
the Russia-Ukraine conflict and the Israel-Palestine
conflict.
Geological risks
Exploration activities are speculative in
nature, and involve many geological considerations. They may not be
successful in identifying commercial mineral resources. Following
any discovery, it can then take several years from the initial
phases of drilling and identification of mineralisation until
construction of the infrastructure and production is possible,
during which time the economic feasibility of production may
change.
On 19 July 2022, the Group
completed the pre- feasibility study for the Orom-Cross graphite
project and a net present value (post tax) assessment of
$482million has been estimated from the project. The
pre-feasibility study indicates a robust, long-term, and profitable
mining operation at Orom-Cross. The Pre-feasibility study was
managed by leading graphite technical experts Battery Limits Pty
Limited (Australia), who have delivered several other graphite
project feasibility study in the past. The estimated production per
annum will be 36,000tpa as 96-97% end products and increasing this
to 147,000tpa in stages. It is estimated that 50% of the product is
+100 to +50 mesh fractions. The pre-feasibility study
estimated a US$1,307/t weighted average selling price for a basket
of end products and US$499/t operating costs, underlining one of
the lowest cost graphite projects worldwide.
On 11 January 2023 the Ugandan
Government approved a landmark one-off permit for Blencowe to
export bulk sample graphite from Orom-Cross for key Metallurgical
final testing. 100 tonnes of bulk samples were mined, and fast
track delivered to China by air freight for initial off -site
testing with a Chinese experienced graphite processing specialist
Jilin Huiyang New Material Technology Company Limited. Blencowe
also send an additional 5kg of concentrate to Chicago-based
graphite specialist AET Co, which is a recognized industry expert
in SPG (spheronised purified graphite) and expandability
testing.
On 23 January 2023, the group
appointed a leading firm from Perth, CPC Engineering to lead,
develop and sign off the Definitive Feasibility study.
The Group uses other advisors with specialist knowledge in
mining and related environmental management for reducing the
impacts of environmental risk.
On 12 February 2024 the Ugandan Government
approved an additional landmark one-off permit for Blencowe to
export bulk sample graphite from Orom-Cross for key Metallurgical
final testing. 600 tonnes of bulk samples were mined, and fast
track delivered to China by sear freight for initial off -site
testing with a Chinese experienced graphite processing specialist
Jilin Huiyang New Material Technology Company Limited. The
processing of the additional Bulk sample and the associated
generation of approximately 25t of concentrate enabled Blencowe to
send materials to specialized firms to generate Spheronised
Purified Graphite (SPG) and test the OROM-Cross product in a
commercial quantity for suitability for off-take parties. Blencowe
also sent an additional 5kg of concentrate to Chicago-based
graphite specialist AET Co, which is a recognized industry expert
in the Graphite industry to generate and test the OROM-Cross
concentrate for micronisation processes.
In July 2024 Blencowe appointed Environmental
Geochemistry International (EGI) to assess the Geohydrology of the
project area to ascertain the supply of water sufficient to sustain
both the processing operations and the local communities. Several
water bores were drilled, and modelling completed that confirmed
the adequate supply of water to sustain both objectives over the
life of the project.
Government regulation and
political risk
The Group's operating activities are subject to laws
and regulations governing expropriation of property, health and
worker safety, employment standards, waste disposal, protection of
the environment, mine development, land and water use, prospecting,
mineral production, exports, taxes, labour standards, occupational
health standards, toxic wastes, the protection of endangered and
protected species and other matters. While the Group believes that
it is in substantial compliance with all material current laws and
regulations affecting its activities, future changes in applicable
laws, regulations, agreements or changes in their enforcement or
regulatory interpretation could result in changes in legal
requirements or in the terms of existing permits and agreements
applicable to the Group or its properties, which could have a
material adverse impact on the Group's current operations or
planned exploration and development projects. Where required,
obtaining necessary permits and licences can be a complex, time
consuming process and the Group cannot assure whether any necessary
permits will be obtainable on acceptable terms, in a timely manner
or at all. The costs and delays associated with obtaining necessary
permits and complying with these permits and applicable laws and
regulations could stop or materially delay or restrict the Group
from proceeding with any future exploration or development of its
properties. Any failure to comply with applicable laws and
regulations or permits, even if inadvertent, could result in
interruption or closure of exploration, development or mining
operations or material fines, penalties or other liabilities.
The Orom-Cross Graphite
Project is located in Uganda. The Group's activities may be
affected in varying degrees by political stability and governmental
regulations. Any changes in regulations or shifts in political
attitudes in the country or any other countries in which the Group
may operate are beyond the control of the Group and may adversely
affect its operations. To mitigate this risk, the Board continues
to review any changes on the government regulations and the
political stability in Uganda.
Pricing risk
The development and success of any project of the
Group will be primarily dependent on the future prices of graphite.
The graphite prices are subject to significant fluctuation and are
affected by a number of factors which are beyond the control of the
Group. Such factors include, but are not limited to exchange rates,
fluctuations in the value of the United States dollar and foreign
currencies, global and regional supply and demand, and political
and economic conditions. The price of graphite and other
commodities have fluctuated widely in recent years, and future
price declines could cause any future development of and commercial
production from the Group's property to be impracticable. Although
the Group expects the project to operate economically, depending on
the price of graphite, projected cash flow from planned mining
operations may not be sufficient for future operations and the
Group could be forced to discontinue any further development and
may lose its interest in, or may be forced to sell, some or all of
its properties. Future production from the Orom-Cross Graphite
Project is dependent on the production of graphite that is adequate
to make the project economically viable. The Board regularly
monitors the prices of graphite and is prepared to raise further
capital if it is required.
Commodity and currency
risk
As the Group's potential earnings will be largely
derived from the sale of graphite, the Group's future revenues and
cash flows will be impacted by changes in the prices and available
market of this commodity. Any substantial decline in the price of
graphite or in transport or distribution costs may have a material
adverse effect on the Group.
Commodity prices fluctuate and are affected by
numerous factors beyond the control of the Group. These factors
include current and expected future supply and demand, forward
selling by producers, production cost levels in major mineral
producing centres as well as macroeconomic conditions such as
inflation and interest rates.
Furthermore, the international prices of most
commodities are denominated in United States dollars while the
Group cost base will be in Pounds Sterling and Ugandan Shilling.
Consequently, changes in the Pound Sterling and Ugandan Shilling
exchange rates will impact on the earnings of the Group. The
exchange rates are affected by numerous factors beyond the control
of the Group, including international markets, interest rates,
inflation and the general economic outlook. The
Directors are confident that they have put in place a strong
management team capable of dealing with the above issues as they
arise.
Financing
On 27 April 2023 the Group announced that it
had found a strategic funding partner for the Orom-Cross Graphite
project, and this was completed on 22 September 2023. The
Development Finance Corporation (DFC) engaged to fund 50% of
Project Definitive Feasibility Study costs by way of a technical
assistance grant. US International Development Finance Corporation
is America's leading development finance institution that partners
with the private sector to provide finance solutions for project
development in markets deemed critical. As of 30 September
2024, the Group received $3.5 million of the $5 million technical
grant funding from the Development Finance Corporation. The Group
is likely to remain cash flow negative for some time and, although
the Directors have confidence in the future revenue earning
potential of the Group from its interests in the Orom-Cross
Graphite Project, there can be no certainty that the Group will
achieve or sustain profitability or positive cash flow from its
operating activities. With regards to future capital expenditure on
the Orom-Cross Graphite Project, the Company will need to raise
additional capital during the next 12 months in order to fully fund
completion of the Definitive Feasibility Study.
The Group has been approached by potential
strategic partners who may eventually provide an offtake, funding
or development scenario for the Orom-Cross graphite project. If
this is not successful, the Board may consider stopping the project
until further cash can be generated.
Future mineral prices, revenues, taxes, capital
expenditures and operating expenses and geological success will all
be factors which will have an impact on the amount of additional
capital required. Additionally, if the Group acquires further
exploration assets or is granted additional permits and/or
exploration licences, this may increase its financial commitments
in respect of the Group's exploration activities.
In common with many exploration entities, the
Group will need to raise further funds in order to progress the
Group from pre-construction phase of its business and eventually
into production of revenues.
Environmental and
safety
The Orom-Cross Graphite Project is still at an
early stage of project development and further consideration will
need to be given to environmental and social issues affecting the
Orom-Cross Graphite Project. During the year the Company undertook
to revise the Environmental and Social Impact Assessment (ESIA) to
account for the expanded project over the scale of project outlined
in the original ESIA and Environmental operating licence granted by
the Ugandan Environmental Agency NEMA -National Environmental
Management Agency). The updated ESIA was undertaken in
consideration of future funding partners with close adherence to
the guidelines issued by IFC, EU and the Equator Principles. The
revised ESIA was Submitted in September 2024 and is currently being
assessed by NEMA. Along with the ESIA the company's Environmental
consultants have generated 10 Environmental and social Management
plans in areas such as Biodiversity, waste management, Mine Closure
and Community Development.
Environmental and safety legislation (e.g. in
relation to reclamation, disposal of waste products, protection of
wildlife and otherwise relating to environmental protection) may
change in a manner that may require stricter or additional
standards than those now in effect, a heightened degree of
responsibility for companies and their directors and employees and
more stringent enforcement of existing laws and regulations. There
may also be unforeseen environmental liabilities resulting from
both future and historic exploration or mining activities, which
may be costly to remedy. Risks may include on-site sources of
environmental contamination such as oil and fuel from the mining
equipment and rehabilitation of the site upon expiry of the Project
Licences. Under Ugandan law the Company is required to rehabilitate
the area affected by the mining activities, accordingly there will
be a potential cost associated with undertaking this obligation. It
is currently unknown what this could be but the funding of this
could have a material impact on the Group's financial position in
the future.
If the Group is unable to fully remedy an
environmental problem, it may be required to stop or suspend
operations or enter into interim compliance measures pending
completion of the required remedy. The potential exposure may be
significant and could have a material adverse effect on the
Group.
The Group has not purchased insurance for
environmental risks (including potential liability for pollution or
other hazards as a result of the disposal of waste products
occurring from exploration and production) as it is not generally
available at a price which the Group regards as
reasonable.
Environmental management systems are in place
to mitigate environmental hazard risks. The Group uses advisors
with specialist knowledge in mining and related environmental
management for reducing the impacts of environmental
risk.
The Group commenced development of the
Environmental and Social Sustainability Governance guidelines which
was independently assessed by an outside agency and an initial
certification provided from which the Group will now work towards
upgrading the certification levels.
Task Force on Climate -related Financial Disclosures
(TCFD)
The Task Force on Climate-related Financial
Disclosures was convened by the Financial Stability Board to
produce a common global framework for companies to report on how
climate change will affect their business.
To help investors and wider stakeholders
understand how companies are managing climate related financial
risks, the TCFD recommends that companies make disclosures across
four key areas, often referred to as the four pillars.
The directors support the initiatives of the
TCFD, and has prepared disclosures to a level of detail that the
directors consider to be consistent with the TCFD recommended
disclosures, and as appropriate to the current position of the
Group as an exploration entity.
The directors consider that several of the
specific disclosures sought under TCFD recommendations will be less
meaningful to users at the current stage of the Company's
Orom-Cross Project and will have greater relevance at the
conclusion of the DFS (due to be completed by the end of May 2025)
and following the commissioning of the Orom-Cross
Project.
1.
Governance
The Company view climate related risks and
opportunities as growing in importance. The Board is ultimately
responsible for the oversight and compliance with local
environmental laws at its exploration location in Uganda, together
with assessment of the impact of climate change on risk to the
organisation.
In advance of commissioning the project
operations, the Group will establish a Sustainability Committee,
comprising the Chairman, the Chief Executive Officer and a
non-executive director, that will guide and support the Group's
environmental approach and plans with respect to climate-related
matters. The Committee will also consider and set appropriate Group
policies that will govern how management assess and manage the
risks and opportunities following commissioning.
Management of the group, who are involved with
the ongoing DFS are responsible for assessing and managing climate
- related risks and opportunities through the current study
process. The DFS will incorporate these factors into assessments
related to the ESIA (environmental and social impact assessment)
and ESG (environmental, social and governance) components of the
study.
2.
Strategy
The Group's project at Orom-Cross is currently
in the stage of completing its Definitive Feasibility Study, the
outcome of which in 2025 will include more detail and assessment to
define the Group's strategic approach to climate-related
matters.
The current global movement towards clean energy
and storage solutions, in which graphite forms an integral part,
together with technological advances in the use of graphite are an
exciting opportunity for the Group to be a significant part of
sustainable energy solutions. As an example of these solutions, the
Group is focussing on current developments (and ongoing
improvements) in the use of electric and Hybrid vehicles in the
excavation and transport in the mining operations as well as
logistic solutions for both project consumables and final
products.
3. Risk
management
Identification and assessment of climate related
risks and opportunities in relation to the Group's activities is
performed by management on an ad-hoc basis. Management have not
assessed there to be any significant climate-related risks that
impact on the current exploration activity in Uganda.
The Group is currently completing the DFS, which
will include ESIA and ESG assessments that will assist management
to detail the climate related risks and opportunities relating to
development of the project. Identification and mitigation of these
risks will be addressed by the planned Sustainability Committee
described in the Governance section of this statement.
At this time the Group operates no corporate
offices either for the management team, or in Uganda, and has no
operational graphite production activity. As such management have
assessed that no significant greenhouse gas (GHG) emissions are
currently produced.
As the project progresses through the DFS, the
risk management framework is somewhat fluid and will be analysed,
adapted and expanded as the various study components of the DFS
develop. The Group is identifying and developing a 'leave no
trace' solution to development wherever possible including
utilising renewable energy supply and electrification options for
operations. These actions will be included in the output of the
DFS.
Management have not identified any
climate-related scenarios that are expected to impact the
resilience of the current exploration works performed by the Group.
Assessment of different climate scenarios will be included in the
works performed for the DFS.
During the year the Group completed a revised
ESIA to cover the enlarged project scope and the introduction of
project alternatives to reduce risk in this area such as the use of
dry stack tailings 100% use of grid Hydropower. The ESIA is
currently under review by the relevant government authorities and
is expected to be approved in the first quarter of 2025. The Group
also undertook an independent assessment of its current ESG
policies and procedures as a base metric at the early stage of the
project and to identify gaps and shortcomings for continual risk
reduction as the DFS is completed and the project moves to
implementation phases.
4. Metrics
and targets
The Company will define the metrics and
performance targets to assess the climate-related risks and
opportunities in line with its strategy and risk management
processes once the Orom-Cross operation has been commissioned.
Initially some of these will be outlined as part of the ESIA and
ESG assessments currently being undertaken for the project
DFS.
As the current exploration operations of the
Group have a minimal physical presence, Greenhouse Gas emissions
are not currently recorded. However as part of the ESIA and ESG
study works, the Group is developing the systems and reporting
standards to track these in preparation for development of the
project. The project reporting and management systems to provide
reporting on Greenhouse and CHG are currently being finalised
following assessment under the independent ESG certification and as
a management plan commitment under the ESIA. The Group are seeking
to test the reporting as part of the exploration drill program
planned for Q1 2025. The development of the operations and
processing routes is an evolving process, as we develop the DFS we
are assessing and designing on processes that will improve on the
GHG and carbon off-sets. As the DFS is not yet completed and the
processes still in evaluation the reporting metrics for the project
are being developed by the ESG team in parallel.
Taxation
In the prior financial year, following an
inspection by the Ugandan Revenue Authority (URA) of the tax
affairs of Consolidated African Resources Uganda ("CARU") covering
the period between January 2014 and December 2022, the Group has
incurred a capital gains tax charge of £392,425 as set out in Note
8 to the Financial Statements. This charge related to the
acquisition by the Company of CARU in 2019. The amount was
chargeable to the former owners, however this was not settled by
them and under Ugandan legislation the liability is reclaimable
from the acquirer if it cannot be obtained from the seller. The
Group has agreed to a payment plan with URA and is currently paying
the liability.
Section 172 Statement
The Board believes they have acted in a way most
likely to promote the success of the Group for the benefit of its
members as a whole, as required by section 172.
The requirements of section 172 are or the Board
to:
· consider the likely consequences of any decision in the long
term,
· act
fairly between the members of the Group,
· maintain a reputation for high standards of business
conduct,
· consider the interest of the Group's employees,
· foster the Group's relationship with suppliers, customers and
others, and
·
consider the impact of the Group's operations on
the community and the environment.
The Group operates a mineral exploration
business, which is inherently speculative in nature and, without
regular income, is dependent upon fund-raising for its continued
operation. The pre-revenue nature of the business is
important to the understanding of the Group by its members,
employees and suppliers, and the Directors are as transparent about
the cash position and funding requirements as is allowed under LSE
regulations.
The principal decisions taken by the Board
during the year relate to the ongoing research and development of
the Orom-Cross Graphite Project, which is still at an early stage
of project development. The Board has looked to build upon the
information available and the exploration activities carried out by
the Subsidiary prior to its acquisition. Through work such as
Metallurgical testwork and preliminary economic assessment the
board continues to gather information on the long-term viability of
the project and the impact on the local community and the
environment. The Board have outlined a work program for the future
strategy of the Project. In order to carry out its strategy, the
company has entered into a number of contracts with providers who
are best placed to undertake the necessary research and
review.
The Board is ultimately responsible for the
direction, management, performance and long-term sustainable
success of the Group. It sets the Group's strategy and objective
considering the interest of all its stakeholders. A
good understanding of the Company's stakeholders enables the Board
to factor the potential impact of strategic decisions on each
stakeholder group into a boardroom discussion. By considering the
Company's purpose, vision and values together with its strategic
priorities the Board aims to make sure that its decisions are fair.
The Board has always taken decisions for the long term and
consistently aims to uphold the highest standards of business
conduct. Board resolutions are always determined with reference to
the interests of the Company's employees, its business
relationships with suppliers and customers. Wherever
possible, local communities are engaged in the geological
operations and support functions required for field operations
providing much needed employment and wider economic benefits to the
local communities. In addition, the Group contributes annually
towards a scholarship programme for the local community in Uganda.
The Board takes seriously its ethical responsibilities to the
communities and environment in which it works. We abide by the
local and relevant UK laws on anti-corruption and
bribery.
Cameron Pearce
Director
30 January 2025
Directors' Report for the
year ended 30 September 2024
The Directors submit their report with the
audited Financial Statements for the year ended 30 September
2024.
General information
Blencowe Resources Plc ("the Company") is a
public company incorporated in England & Wales.
Blencowe's primary focus is on exploration of
the Orom-Cross Graphite Project located in
Northern Uganda.
Results for the year and distributions
The Group results are set out in the
Consolidated Statements of Comprehensive Income. The total
consolidated comprehensive loss attributable to the equity holders
of the Group for the financial year was £902,801 (2023:
£1,366,685). The Group received no income, and the full amount of
the loss is due to expenses incurred in capital raising (to the
extent not deducted from share premium), and general corporate
overheads.
The Group paid no distribution or dividends
during the financial year (2023: £Nil).
The
Board of Directors
The Directors who held office during the
financial year and to the reporting date, together with details of
their interest in the shares of the Company at the reporting date
were:
|
|
|
Number of Ordinary
Shares
|
Percentage of Ordinary
Shares
|
|
|
|
|
|
|
Sam Quinn
|
|
4,916,667
|
2.17%
|
|
Cameron Pearce
|
|
7,516,667
|
3.32%
|
|
Alexander Passmore
|
|
1,550,000
|
0.68%
|
The Board comprises of one Executive Director
and two Non-Executive Directors as detailed below:
Cameron Pearce - Executive
Chairman
Cameron Pearce was a founder of
the Company and has extensive professional experience in both the
Australian and United Kingdom finance industries. In recent times
he has provided corporate, strategic, financial and advisory
assistance to private and public companies in both Australia and
the United Kingdom. Mr Pearce is a member of the Australian
Institute of Chartered Accountants and has been in commerce over
twenty years holding senior financial and management positions in
both publicly listed and private enterprises in Australia, Europe,
Asia, Africa and Central America. Mr Pearce has considerable
corporate and international expertise and over the past decade has
focussed on mining and exploration activities.
Sam Quinn - Non Executive
Director
Sam Quinn is a corporate lawyer
with over a decade's worth of experience in the natural resources
sector, in both legal counsel and executive management positions.
Mr Quinn was formerly the Director of Corporate Finance and Legal
Counsel for the Dragon Group, a London-based natural resources
venture capital firm and is currently a partner of Silvertree
Partners, a natural resource focussed back office outsourcing
business. Mr Quinn has in addition held several management roles
for listed and unlisted natural companies and has gained
significant experience in the administration, operation, financing
and promotion of natural resource companies. Prior to working in
the natural resources sector, Mr Quinn worked as a corporate lawyer
for Jackson McDonald Barristers & Solicitors in Perth, Western
Australia and for Nabarro LLP in London.
Alex Passmore - Non Executive
Director
Alex Passmore is an experienced corporate
executive with strong financial and technical background. Mr
Passmore managed the arrangement of debt for many well-known
resources companies and has a wealth of experience in project
evaluation. He also managed the WA natural resources business of
CBA which comprised a substantial portfolio of loan, hedge, trade
finance and working capital products to ASX-listed and
multi-national resource companies. Prior to this, Mr Passmore held
senior roles at Patersons Securities and was director of corporate
finance and head of research. Mr Passmore holds a BSc (Hons) in
Geology from the University of Western Australia and a graduate
diploma of Applied Finance and Investments from the Institute of
Securities Australia.
Directors' indemnities
To the extent permitted by law and
the Articles, the Company has made qualifying third-party indemnity
provisions for the benefit of its directors during the year, which
remain in force at the date of this report.
Policy for new appointments
Without prejudice to the power of the Company
to appoint any person to be a Director pursuant to the Articles the
Board shall have power at any time to appoint any person who is
willing to act as a Director, either to fill a vacancy or as an
addition to the existing Board, but the total number of Directors
(other than alternate directors) must not be less than two and must
not be more than 15 in accordance with the Articles. Any Director
so appointed shall hold office only until the annual general
meeting of the Company next following such appointment and shall
then be eligible for re-election but shall not be taken into
account in determining the number of Directors who are to retire by
rotation at that meeting. If not re-appointed at such annual
general meeting, he shall vacate office at the conclusion
thereof.
Rules for amendments of articles
Directors cannot alter the Company's Articles
unless a special resolution is approved by the shareholders. A
special resolution requires at least 75% of a company's members to
vote in favour for it to pass.
Substantial shareholders
The share capital of Blencowe consist of only
one class: ordinary shares. Therefore, all of the Company's shares
rank pari passu and no preferential rights apply. No single person
directly or indirectly, individually or collectively, exercises
control over the Company. The Directors are aware of the following
persons, who had an interest in 3% or more of the issued ordinary
share capital of the Company as at 31 December 2024:
|
Shareholder
|
% of issued share capital of the
Company
|
|
|
|
|
Pershing Nominees
Limited
|
18.97%
|
|
Hargreaves Lansdown (Nominees)
Limited
|
14.18%
|
|
Interactive investors services Nominees
Limited
|
8.64%
|
|
Morgan Stanley Client Securities Nominees
Limited
|
7.49%
|
|
JIM Nominees Limited
|
5.95%
|
|
Lawshare Nominees
Limited
|
4.83%
|
|
ADT Drilling Limited
|
4.18%
|
|
Vidacos Nominees
Limited
|
4.11%
|
|
The Bank of New York (Nominees)
Limited
|
3.73%
|
The Directors are not aware of any changes in
interests between 31 December 2024 and the date of approval of the
financial statements.
Financial risk management
The Group's principal financial
instruments comprise cash and cash equivalents, trade and other
payables and trade and other receivables arising in the normal
course of its operations.
The Group's objectives when managing capital are
to safeguard the Group's ability to continue as a going concern in
order to provide returns for shareholders and benefits for other
stakeholders and to maintain an optimal capital structure to reduce
the cost of capital. In order to maintain or adjust the capital
structure, the Group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares, or
sell assets to reduce debt.
The Group's activities expose it to a variety of
financial risks: market risk, credit risk, liquidity risk and cash
flow interest rate risk. See note 18.2 for more information on the
financial risk management objectives and policies.
Greenhouse Gas (GHG) Emissions
The energy consumption has not been disclosed
as the Group's consumption is below 40,000 kWh
Responsibility statement
The Directors are responsible for preparing
the Annual Report and the Financial Statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare
financial statements for each financial year. Under that law, the
Directors have elected to prepare the financial statements in
accordance with UK adopted international accounting standards.
Under company law, the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs and profit or loss of the Company and
Group for that period.
In preparing these Financial Statements, the
Directors are required to:
·
select suitable accounting policies and then apply them
consistently;
·
make judgements and accounting estimates that are reasonable
and prudent;
·
state whether UK adopted international accounting standards
have been followed, subject to any material departures disclosed
and explained in the financial statements; and
·
prepare the financial statements on a going concern basis,
unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping
adequate accounting records that are sufficient to show and explain
the Company's transactions and disclose with reasonable accuracy at
any time the financial position of the Company and Group to enable
them to ensure that the financial statements comply with the
requirements of the Companies Act 2006. They are also responsible
for safeguarding the assets of the Company and Group and hence for
taking reasonable steps for the prevention and detection of fraud
and other irregularities.
The Directors are responsible for preparing the
Annual Report in accordance with applicable law and regulations.
The Directors consider the Annual Report and the financial
statements, taken as a whole, provide the information necessary to
assess the Group's position, performance, business model and
strategy and are fair, balanced and understandable.
The Directors are responsible for the
maintenance and integrity of the corporate and financial
information included on the Company's website. Legislation in the
United Kingdom governing the preparation and dissemination of
financial statements may differ from legislation in other
jurisdictions.
Directors'
responsibilities pursuant to DTR4
The Directors confirm to the best of their
knowledge:
·
the financial statements have been prepared in accordance
with UK adopted international accounting standards and give a true
and fair view of the assets, liabilities, financial position and
profit or loss of the Group; and
·
the management report includes a fair review of the
development and performance of the business and the financial
position of the Group, together with a description of the principal
risks and uncertainties that they face.
Embed effective risk management, considering both
opportunities and threats, throughout the
organisation
The Directors are responsible for maintaining
the Group's systems of controls and risk management in order to
safeguard its assets.
Risk is monitored and assessed by the Board who
meet regularly and are responsible for ensuring that the financial
performance of the Group is properly monitored and reported. This
process includes reviews of annual and interim accounts, results
announcements, internal control systems, procedures and accounting
policies.
Subsequent events
Please see note 20 for details of the Group's
subsequent events.
Directors' confirmation
So far as the directors are aware, there is no
relevant audit information of which the Group's auditors are
unaware, and they have taken all steps that they ought to have
taken as directors in order to make themselves aware of any
relevant audit information and to establish that the Group's
auditors are aware of that information.
Auditors
The auditors, Crowe U.K LLP, have expressed
their willingness to continue in office and a resolution to
reappoint them will be proposed at the Annual General
Meeting.
By Order of the Board
Cameron Pearce
Director
30 January 2025
Corporate Governance
The Group recognises the importance of, and is
committed to, high standards of Corporate Governance. Whilst
the Group is not formally required to comply with the UK Corporate
Governance Code 2018, the Group will try to observe, where
practical, the requirements of the UK Corporate Governance Code
2018, as published by The Financial Reporting Council.
The Company intends to voluntarily observe the
requirements of the UK Corporate Governance Code 2018, save as set
out below. As at the date of the financial statements the Directors
consider the Group to be in compliance with the UK Corporate
Governance Code 2018 with the exception of the
following:
·
The Company does not comply with the requirements
of the UK Corporate Governance Code in relation to the requirement
to have a senior independent director and the Audit Committee does
not have three independent non-executive directors. The Nomination
& Remuneration Committees also do not include independent
directors.
·
Due to the current size of the company, and the
early stages of the Project's life cycle, the Company has not
developed a formal diversity policy, and investment in and
rewarding of the workforce. Furthermore, there have been no board
evaluations conducted within the year.
·
All directors are not subject to annual
re-election. Instead at least one third of the current directors
are put forward for re-election at each annual general meeting, in
accordance with the Company's Articles of Association.
·
Remuneration for the non-executive directors
includes share options. The awards are made in accordance with the
Company's remuneration policy.
·
The Board does not consider there to be a need
for a formal succession plan at this stage, but this will be
monitored as the size and complexity of the Company's activities
develop.
As at the date of the financial statements, the
Board has a share dealing code that complies with the requirements
of the Market Abuse Regulations. All persons discharging management
responsibilities (comprising only the Directors at the date of this
Document) shall comply with the share dealing code from the date of
Admission.
Set below are Blencowe Resources Plc's corporate
governance practices for the year ended 30 September
2024.
Leadership
The Company is headed by an effective Board
which is collectively responsible of the long-term success of the
Company.
The role of
the Board - The Board sets the Company's
strategy, ensuring that the necessary resources are in place to
achieve the agreed strategic priorities, and reviews management and
financial performance. It is accountable to shareholders for the
creation and delivery of strong, sustainable financial performance
and long-term shareholder value. To achieve this, the Board directs
and monitors the Company's affairs within a framework of controls
which enable risks for the future success of the business to be
assessed and managed effectively. The Board also has responsibility
for setting the Company's core values and standards of business
conduct and for ensuring that these, together with the Company's
obligations to its stakeholders, are widely understood throughout
the Company. The Board has a formal schedule of matters reserved
which is provided later in this report.
The Company aims to generate and preserve
value over the long-term primarily through the development of its
principal asset, the Orom-Cross Graphite project in the Republic of
Uganda. The Company has previously completed a preliminary
feasibility study on the project and is now in the process of
completing a definitive feasibility study which will provide a
risked and independent project valuation to international
standards. The DFS process is rigorous and will result in an
examination of all aspects of the project including economic
viability, principal risks as well as engineering and geological
matters.
Board
Meetings - The core activities of the Board are
carried out in scheduled meetings of the Board. These meetings are
timed to link to key events in the Company's corporate calendar and
regular reviews of the business are conducted. Additional meetings
and conference calls are arranged to consider matters which require
decisions outside the scheduled meetings. During the year, the
Board met on 6 occasions. Any concerns identified that cannot be
resolved in these meetings will be documented in written form to
the Chairman and recorded in the formal minutes of the
Company. In addition to the
Board meetings linked to corporate
transactions, the directors consider on an ad hoc, non-formal basis
their effectiveness and relevance, and that of
management.
Outside the scheduled meetings of
the Board, the Directors maintain frequent contact with each other
to discuss any issues of concern they may have relating to the
Company or their areas of responsibility, and to keep them fully
briefed on the Company's operations.
Matters reserved specifically for Board
- The Board has a formal schedule of matters
reserved that can only be decided by the Board. The key matters
reserved are the consideration and approval of:
· the
Group's overall strategy;
· financial statements and dividend policy;
· management structure including succession planning,
appointments and remuneration;
· material acquisitions and disposal, material contracts, major
capital expenditure projects and budgets;
· capital structure, debt and equity financing and other
matters;
· risk
management and internal controls;
· the
Group's corporate governance and compliance arrangements;
and
· corporate policies
Summary of the
Board's work in the financial year - During the
year, the Board considered all relevant matters within its remit,
but focused in particular on exploration and development of the
Orom-Cross Graphite Project.
Attendance at meetings:
|
Member
|
|
Meeting attended
|
|
Cameron
Pearce
|
Executive
Chairman
|
5
|
|
Sam Quinn
|
Non-Executive
Director
|
5
|
|
Alexander
Passmore
|
Non-Executive
Director
|
6
|
The Board is pleased with the
level of attendance and participation of Directors at Board and
committee meetings.
The Chairman, Cameron Pearce, sets
the Board Agenda and ensures adequate time for
discussion.
Non-executive Directors - The
non-executive Directors bring a broad range of business and
commercial experience to the Company and have a particular
responsibility to challenge independently and constructively the
performance of the Executive management (where appointed) and to
monitor the performance of the management team in the delivery of
the agreed objectives and targets.
Non-executive Directors - Are
initially appointed for a term of three years, which may, subject
to satisfactory performance and re-election by shareholders, be
extended by mutual agreement.
Other governance matters -
All of the Directors are aware that independent professional advice
is available to each Director in order to properly discharge their
duties as a Director. In addition, each Director and Board
committee has access to the advice of the Company
Secretary.
The Company Secretary - The
Company Secretary is FIM Secretaries IOM Limited which was
appointed on 1 November 2024. FIM Secretaries IOM Limited is
available to Directors and advises the Board on UK compliance
matters.
Effectiveness
For the period under review the Board comprised
of an Executive Chairman and two non-executive
Directors.
The Directors are of the view that the Board
and its committees consist of Directors with an appropriate balance
of skills, experience, independence and diverse backgrounds to
enable them to discharge their duties and responsibilities
effectively.
The Board believes it has the correct balance
of skills, reflecting a broad range of commercial and professional
skills across geographies and relevant industries that is necessary
to ensure the Company is equipped to deliver its investment
objective. Additionally, each Director has experience in public
markets.
The Directors and their roles and key
personnel are displayed on the Company's website:
Management
& Directors - Blencowe Resources
(blencoweresourcesplc.com)
Independence
- None of the Directors are considered to be
independent, as they have shareholdings in the Company as noted on
page 11. It is intended that additional Directors will be
appointed in future and that independence will be one of the key
factors considered at that time. As at the date of this Report no
prospective Directors have been identified and no arrangements
exist (formal or informal) for the appointment of any other
Director.
Appointments - The
Board is responsible for reviewing the structure, size and
composition of the Board and making recommendations to the Board
with regards to any required changes. The non-executive directors informally scrutinise and hold to
account the performance of management and the Executive Chairman,
there are no other Executives on the Board. The Board are satisfied
with the current size and composition of the Board and
management.
Commitments
- All Directors have disclosed any significant
commitments to the Board and confirmed that they have sufficient
time to discharge their duties.
Induction
- All new Directors received an induction as
soon as practical on joining the Board.
Conflict of
interest - A Director has a duty to avoid a
situation in which he or she has, or can have, a direct or indirect
interest that conflicts, or possibly may conflict with the
interests of the Company. The Board had satisfied itself that there
is no compromise to the independence of those Directors who have
appointments on the Boards of, or relationships with, companies
outside the Company. The Board requires Directors to declare all
appointments and other situations which could result in a possible
conflict of interest.
Accountability
The Board is committed to provide shareholders
with a clear assessment of the Group's position and
prospects. This is achieved through this report and as required
other periodic financial and trading statements.
Going concern - As part of their going concern
assessment set out in note 2.3, the Board of Directors have
reviewed cash flow forecasts for the 12 months from the date these
financial statements were signed and considered the medium-term
outlook through to December 2027 as described in the Viability
Statement. The Directors have a reasonable expectation that the
Group will be able to continue in operation and meet its
liabilities as they fall due over the period to December 2027,
provided further funding can be raised as required. Due to the
requirement to raise additional funding, a material uncertainty
with regard to going concern has been disclosed at note
2.3.
Risk is monitored and assessed by the Board as
a whole and are responsible for ensuring that the financial
performance of the Company is properly monitored and reported. This
process includes reviews of annual and interim accounts, results
announcements, internal control systems, procedures and accounting
policies. Risk management is carried out by the Board of Directors.
The Board identifies and evaluates financial risks, and the key
risk factors for the Company are contained in the Financial
Statements for the year ended 30 September 2024.
Internal
controls - The Board of Directors reviews the
effectiveness of the Company's system of internal controls in line
with the requirement of the Code. The internal control system is
designed to manage the risk of failure to achieve its business
objectives. This covers internal financial and operational
controls, compliance and risk management. Key controls
consist of segregation of duties, authorisation and approval
policies and accounting controls such as monthly reconciliations.
The Directors consider the Company has appropriate and effective
internal controls in place for the year under review and up to the
date of approval of the Annual Report and Financial Statements. The
Directors acknowledge their responsibility for the Company's system
of internal controls and for reviewing its effectiveness. Risk is
monitored, assessed and managed by the Board as a whole who are
responsible for ensuring that the financial performance of the
Company is properly monitored and reported. This process includes
reviews of annual and interim accounts, results announcements,
internal control systems, procedures and accounting policies. The
finance function is outsourced to FIM Capital Limited and details
of the duties performed are in a formal agreement. The Board
confirms the need for an ongoing process for identification,
evaluation and management of significant risks faced by the
Company. The Directors carry out a risk assessment before signing
up to any commitments.
The Audit Committee
The Audit Committee consists of Cameron
Pearce, Chair of the Committee, and Alex Passmore. It aims to meet
at least twice a year and is responsible for ensuring that the
Group's financial performance is properly monitored, controlled,
and reported to the Board. During the review year, the Audit
Committee met twice.
The Committee oversees the scope and
effectiveness of the external audit and ensures the Group complies
with statutory and other regulatory requirements. Given the size of
the Group and the relative simplicity of its systems, the Board has
determined that there is currently no need for an internal audit
function. The existing procedures for internal financial control,
including expenditure controls, regular reconciliations, and
management accounts, are deemed appropriate for a Group of this
size. The need for an internal audit function will remain under
review as the Group's operations evolve and become more complex,
particularly with the planned development of the
project.
In line with the UK Corporate Governance Code,
the Audit Committee's work during the year included:
· Reviewing
significant issues relating to the financial statements, such as
the assessment of impairment of intangible assets, and ensuring
these were appropriately addressed.
· Assessing the
independence and effectiveness of the external audit process, which
included considering the approach to the appointment or
reappointment of the external auditor. The Committee reviewed the
length of tenure of the current audit firm, discussed when a tender
was last conducted, and provided advance notice of any retendering
plans, where applicable.
· Evaluating how
auditor independence and objectivity are safeguarded, particularly
when non-audit services are provided by the external
auditor.
The Audit Committee monitors in discussion
with the auditors:
· The integrity of
the Group's financial statements and significant financial
reporting judgements, such as the assessment of impairment of
intangible assets.
· Any formal
announcements relating to the Group's financial
performance.
· The Group's
internal financial controls and risk management systems.
· The external
auditor's independence and objectivity and the effectiveness of the
audit process, taking into account relevant UK professional and
regulatory requirements.
The Directors are responsible for taking all
reasonably available steps to safeguard the Company's assets and to
prevent and detect fraud and other irregularities
External auditor's
independence
Since the last tender which was conducted in
2018, Crowe U.K LLP has acted as independent auditor for seven
years. The Audit Committee have held discussions with the external
auditors to confirm there are no non-audit services provided, and
no other independence considerations they should be aware
of.
Remuneration and Nominations
Committee
A Remuneration and Nominations Committee was
established during 2020 and is made up of the two non-executive
directors. The Committee comprises Sam Quinn, chairman of the
committee, and Alex Passmore. They are not considered to be
independent directors. The Board considers the committee
composition of two directors to be sufficient due to the size of
the company at this time. The Remuneration and Nomination Committee
meets at least annually and is responsible for setting the
remuneration policy for all executive directors and the Company's
chairman, including any compensation payments; recommends and
monitors the level and structure of remuneration for senior
management; evaluates the board of
directors and examines the skills and characteristics required of
board candidates. During the year of
review, the Remuneration and Nomination Committee met
once.
Remuneration paid to Directors in the period
under review is disclosed in the Directors' Remuneration
Report.
The Committee is dedicated to implementing a
remuneration policy that promotes long-term incentives and aligns
the interests of directors with those of shareholders. Share and
option awards should be phased, contain performance milestones
where appropriate and encourage long term participation.
The Committee considers in defining the
remuneration policy that arrangements should be clear and
transparent, should avoid undue complexity, and should be
proportional to the services provided in delivering the Company's
strategy and purpose.
The Remuneration Committee to date has focused
on share options and bonus payments as the main incentives for
executives, given the stage of development of the Company and to
further align senior management with shareholder interests.
Typically share options are subject to vesting conditions, such as
completion of feasibility studies or the introduction of strategic
partners. In addition, share price hurdles have been used to
provide further shareholder alignment. Given the nature of the
Company as the developer of a mining project and the potential for
rerating of the Company's value as the project advances, having a
direct equity exposure is deemed to be the most desirable form of
management incentive. In addition, cash bonus payments are
generally kept to a minimum to preserve the Company's capital.
Share options will typically expire three months following the
cessation of employment.
In accordance with the Company's
Articles of Association, at every annual general
meeting at least one third of the current directors who are subject
to retirement by rotation will be put forward to retire.
Shareholder relations
Communication
and dialogue - Open and transparent
communication with shareholders is given high priority and there is
regular dialogue with institutional investors, as well as general
presentations made at the time of the release of the annual and
interim financial results. All Directors are kept aware of changes
in major shareholdings in the Company and are available to meet
with shareholders who have specific interests or concerns. The
Company issues its results promptly to the market via RNS and also
publishes them on the Company's website:
www.blencoweresourcesplc.com.
Regular market news updates are made in relation to the Company
including the status of its exploration and development programme
which is also included on the Company's website. Shareholders and
other interested parties can subscribe to receive news updates by
email by registering online on the website free of
charge.
The Directors are available to meet with
institutional shareholders to discuss any issues and gain an
understanding of the Company's business, its strategies and
governance. Meetings are also held with the corporate governance
representatives of institutional investors when
requested.
Annual General
Meeting - At every AGM individual shareholders
are given the opportunity to put questions to the Chairman and to
other members of the Board that may be present. Notice of the AGM
is sent to shareholders at least 21 working days before the
meeting. Details of proxy votes for and against each resolution,
together with the votes withheld are announced to the London Stock
Exchange and are published on the Company's website as soon as
practical after the meeting.
Viability
statement
In accordance with provision 31 of
the UK Corporate Governance Code (2018), the Board has assessed the
prospects of the Group over a three-year period, taking account of
the Group's current position and principal risks. For information
regarding Group's going concern position and funding requirements
over the next twelve months, please see note 2.3.
Time frame
The Board believes that three
years is currently the most appropriate time frame over which the
Board should assess the long-term viability of the Group. The
Group's current activities do not generate any revenues or positive
operating cash flow, and the completion of the Definitive
Feasibility Study for the Orom-Cross Graphite Project will require
further capital expenditures.
Assessing viability
The main assumption in the Board
making its viability assessment is the ability of the Group to
raise further funds in order to progress from the exploration phase
into feasibility and eventually into production of revenues. The
Group may not be able to obtain additional financing as and when
needed which could result in a delay or indefinite postponement of
exploration and development activities. The main development
activities that the company will be focused on in the next 3years,
dependent upon raising the funds required, will be the construction
of the 5,000t/yr plant and commencement of production in quarter 2
2026, the commencement of construction of the 50,000t/yr processing
plant in 2026 and production in 2027. The construction and
operation of the SPG plant is expected to run in parallel with the
50,000t plant. The company will assess the commercial operations
and costs in further detail with the DFS and ongoing assessment of
the operations and costs during tendering and
construction.
Principal risk
The Directors have conducted a
robust assessment of the principal risks facing the Group as
described on the preceding pages including those that threaten its
business model, future performance, solvency or liquidity. The
Directors are confident that they have put in place a strong
management team with wide-ranging expertise in mineral exploration
and development who are capable of dealing with the risk management
in order to safeguard the Group's assets. The directors are aware
that the risks that could have the most adverse effect are
funding and capital markets, potential other risks include
the political risk in the country of business.
Based on the financial impact of
the analysis outlined above and the associated risks, management
actions and controls that are either in place or could be
implemented, the Board expects that the Company will be able to
deliver the Orom-Cross Graphite Project.
Confirmation of
viability
Taking account of these matters,
the Directors have a reasonable expectation that the Group will be
able to continue in operation and meet its liabilities as they fall
due over the period to December 2027, assuming that the financing
referred to above is completed as described. The Company's going
concern statement is detailed in note 2.3.
By Order of the Board
Cameron Pearce
Director
30 January 2025
Directors Remuneration Report
Statement of Blencowe Plc's policy on Directors'
Remuneration
The Directors' Remuneration Report sets out the
Company's policy on the remuneration of Directors together with the
details of Directors' remuneration packages and services contracts
for the year ended 30 September 2024.
As set out in the Company's Prospectuses dated
30 March 2020 and 26 November 2024, each of the Directors may be
paid a fee at such rate as may from time to time be determined by
the Board. All the Directors are entitled to be reimbursed by the
Company for travel, hotel and other expenses incurred by them in
the course of their directors' duties relating to the
Company.
There have been no changes to the Directors'
remuneration or remuneration policy since the publication of the
Company's Prospectus dated 30 March 2020 with the exception of
those mentioned below. The terms and conditions of appointment for
all the members of the Board are available for inspection at our
registered office.
Terms of employment
Cameron Pearce was appointed on 8 June 2018 by
the Company to act as a Non-Executive Director and Chairman of the
Company and from 1 July 2024 is paid fees of £120,000 per annum. If
there is a change of control (as defined in the letter of
appointment), Mr Pearce will be entitled to 100% of his annual fee
as a lump sum payment if the Company terminates his employment, or
if Mr Pearce chooses to terminate his appointment within 12 months
following a change of control.
Sam Quinn was appointed on 8 June 2018 by the
Company to act as a Non-Executive Director and from 1 July 2024 is
paid fees of £60,000 per annum. If there is a change of
control (as defined in the letter of appointment), Mr Quinn will be
entitled to 100% of his annual fee as a lump sum payment if the
Company terminates his employment, or if Mr Quinn chooses to
terminate his appointment within 12 months following a change of
control.
Alex Passmore was appointed on 8 June 2018 by
the Company to act as a Non-Executive Director and is from 1 July
2024 is paid fees of £24,000 per annum. If there is a change of
control (as defined in the letter of appointment), Mr Passmore will
be entitled to 100% of his annual fee as a lump sum payment if the
Company terminates his employment, or if Mr Passmore chooses to
terminate his appointment within 12 months following a change of
control.
Remuneration policy
Base salary levels will take into account market
data for the relevant role, internal relativities, the individual's
experience and their current base salary. Where an individual is
recruited below market norms, they may be re-aligned over time
(e.g. two to three years), subject to performance in the role.
Benefits will generally be in accordance with the approved policy.
Currently, there are no benefits in place.
The appointment of each Director may be
terminated by either party on six months' notice, which the Company
considers to be an appropriate notice period to retain key
personnel.
The Remuneration and Nomination
Committee comprises Sam Quinn, who acts as
chairman of the committee and Alex Passmore, and meets at least
annually. The Remuneration Committee reviews the
scale and structure of the Directors' fees, considering the
interests of the shareholders and the performance of the Company
and Directors. Bonuses, pay rises and the grant of long term
incentives such as share options are linked to the achievement of
key funding and project milestones that are set from time to time
by the Committee.
The items included in this report are unaudited
unless otherwise stated.
The Company maintains contact with its
shareholders about remuneration in the same way as other matters
and, as required by Section 439 of the Companies Act 2006, this
remuneration report will be put to an advisory vote of the
Company's shareholders at the forthcoming Annual General
Meeting.
Directors' emoluments and compensation
(audited)
Set out below are the emoluments of the
Directors:
|
|
Cameron Pearce
|
Sam Quinn
|
Alexander Passmore
|
Total
|
|
|
|
|
|
|
|
30 September 2023
|
|
|
|
|
|
Base fee
|
96,000
|
24,000
|
18,000
|
138,000
|
|
Share Based Payments
|
5,239
|
5,239
|
2,619
|
13,097
|
|
Total 30 September 2023
|
101,239
|
29,239
|
20,619
|
151,097
|
|
|
|
|
|
|
|
30 September 2024
|
|
|
|
|
|
Base fee
|
102,000
|
30,000
|
19,500
|
151,500
|
|
Share based payments
|
-
|
-
|
-
|
-
|
|
Total 30 September 2024
|
102,000
|
30,000
|
19,500
|
151,500
|
The percentage of directors' emoluments of the
total administrative costs for the year is 19% (2023: 12%). The
directors' base fees increased by £13,500, reflecting the fee
increases applicable from 1 July 2024 (2023: Nil increase) while
the base salary costs of the key management employees did not
increase (2023: Nil increase).
Statement of Directors' shareholding and share interest
(audited)
The Directors who served during the year ended
30 September 2024, and their
interests at that date, are disclosed on page 11.
Issue of options
As at the reporting date, the number of shares
options that the Company has issued to the Board and Senior
Management are as follow;
|
Cameron Pearce
(Chairman)
|
5,000,000
|
|
|
Mike Ralston (CEO)
|
5,500,000
|
|
|
Lionshead Consultants Ltd
(Sam Quinn) (Non Exec Director)
|
3,750,000
|
|
|
Alexander Passmore (Non
Exec Director)
|
1,750,000
|
|
|
Iain Wearing (COO)
|
5,000,000
|
|
For further information, please see note
17.
Other matters
The Company does not currently have any annual
or long-term incentive schemes (other than the one stated above) in
place for any of the Directors and as such there are no disclosures
in this respect.
The Company does not have any pension plans for
any of the Directors and does not pay pension amounts in relation
to their remuneration.
The Company has not paid out any excess
retirement benefits to any Directors or past Directors. The Company
has not paid any compensation to past Directors.
By Order of the Board
Sam Quinn
Director
30 January 2025
Independent Auditor's Report to the
Members of Blencowe Resources Plc
Opinion
We have audited the financial statements of Blencowe
Resources Plc (the "Company") and its subsidiaries (the 'Group')
for the year ended 30 September 2024 which comprise the
Consolidated statement of comprehensive income, Consolidated
statement of financial position, Parent statement of financial
position, Consolidated statement of changes in equity, Parent
statement of changes in equity, Consolidated statement of cash
flows, Parent statement of cash flows and notes to the financial
statements, including accounting policies. The financial reporting
framework that has been applied in the preparation of the Group and
Company financial statements is applicable law and UK-adopted
international accounting standards.
In our opinion:
· the financial
statements give a true and fair view of the state of the Group's
and of the Company's affairs as at 30 September 2024 and of the
Group's loss for the year then ended;
· the Group and the
Company financial statements have been properly prepared in
accordance with UK-adopted international accounting standards;
and
· the
financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
Basis for
opinion
We conducted our audit in accordance with
International Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further
described in the Auditor's responsibilities for the audit of the
financial statements section of our report. We are independent of
the Group and the Company in accordance with the ethical
requirements that are relevant to our audit of the financial
statements in the UK, including the FRC's Ethical Standard as
applied to listed public interest entities, and we have fulfilled
our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our
opinion.
Material
uncertainty in relation to going concern
We draw attention to note 2.3 to the financial
statements, which explains that the Group and Company's ability to
continue as a going concern is dependent on the availability on
further fundraising to complete the Definitive Feasibility Study
and meet its obligations as they fall due. These conditions
indicate the existence of a material uncertainty which may cast
significant doubt over the Group's and Company's ability to
continue as a going concern. Our opinion is not modified in respect
of this matter.
In auditing the financial statements, we have
concluded that the directors' use of the going concern basis of
accounting in the preparation of the financial statements is
appropriate. We have highlighted going concern as a key audit
matter due to the estimates and judgements the Directors are
required to make in their going concern assessment, and their
effect on our audit strategy. Our audit work in response to this
key audit matter included:
· We obtained the
going concern assessment prepared by the directors, and performed a
detailed review of the supporting cash flow forecasts.
· We assessed the
systems and controls in place for the preparation of management's
going concern projections.
· We reviewed the
prior year going concern projections against the actual performance
in the current financial year, in order to assess management's
ability to forecast accurately.
· We checked the
mathematical accuracy of the projections and agreed the opening
cash position to bank statements. We ensured that the period of
going concern assessment covered at least twelve months from the
date of approval of the financial statements, and enquired
regarding any matters shortly after this date that would impact the
going concern consideration.
· We challenged
the key assumptions based on expected activity within the going
concern period, and comparison to historical actual monthly
expenditure.
· We considered
other potential indicators of matters impacting going concern,
including title to the Group's principal mineral license
ML1959.
· We reviewed the
requirements of the remaining tranches of the grant awarded by the
US Development Funding Council and discussed with the directors how
these were factored into budgets and exploration plans during the
going concern assessment period.
· We held
discussions with the directors on how they plan to raise the
additional funding required by the cash flow forecasts. This was
considered against their previous success in fundraising for the
project.
· We reviewed the
completeness of disclosures made in the financial statements in
relation to going concern, and that these are in line with the
going concern assessment provided to us by the
directors.
Our responsibilities and the responsibilities
of the directors with respect to going concern are described in the
relevant sections of this report.
Overview
of our audit
approach
Materiality
In planning and performing our audit we applied the
concept of materiality. An item is considered material if it could
reasonably be expected to change the economic decisions of a user
of the financial statements. We used the concept of materiality to
both focus our testing and to evaluate the impact of misstatements
identified.
Based on our professional judgement, we determined
overall materiality for the financial statements as a whole to be
£150,000 (2023 £155,000), based on approximately 2% of total
assets. Materiality for the Company financial statements as a whole
was set at £137,000 (2023: £140,000) based on approximately 2% of
total assets.
We use a different level of materiality
('performance materiality') to determine the extent of our testing
for the audit of the financial statements. Performance
materiality is set based on the audit materiality as adjusted for
the judgements made as to the entity risk and our evaluation of the
specific risk of each audit area having regard to the internal
control environment. Performance materiality was
set at 70% of materiality for the financial statements as a whole,
which equates to £105,000 (2023: £108,500) for the Group and
£95,900 (2023: £98,000) for the Company.
Where considered appropriate performance materiality
may be reduced to a lower level, such as, for related party
transactions and directors' remuneration.
We agreed with the Audit Committee to report to it
all identified errors in excess of £7,500 (2023: £7,700). Errors
below that threshold would also be reported to it if, in our
opinion as auditor, disclosure was required on qualitative
grounds.
Overview
of the scope of our audit
Our Group audit was scoped by obtaining an
understanding of the Group and its environment, including the
Group's system of internal control, and assessing the risks of
material misstatement in the financial statements. We also
addressed the risk of management override of internal controls,
including assessing whether there was evidence of bias by the
Directors that may have represented a risk of material
misstatement.
The Group operates through the Company based in the
United Kingdom which performs administrative functions and provides
funding to its exploration subsidiary in Uganda Consolidated Africa
Resources Ltd- ("CARU"). The Company, and its Ugandan subsidiary
CARU, were considered to be significant components.
In establishing our overall approach to the group
audit, we determined the type of work that needed to be performed
in respect of each component. As significant components, full scope
audit were performed for both the Company and CARU. Risk assessment
analytical procedures were performed over the results of Blencowe
Battery Mines Uganda - SMC Ltd. All audit work was carried out by
the group audit team.
Given CARU is in the exploration stage of its work,
we did not consider it necessary to visit Uganda. Documentation and
explanations from Uganda were obtained by email and through
telephone calls.
Key Audit
Matters
Key audit matters are those matters that, in our
professional judgment, were of most significance in our audit of
the financial statements of the current period and include the most
significant assessed risks of material misstatement (whether or not
due to fraud) we identified, including those which had the greatest
effect on the overall audit strategy, the allocation of resources
in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these
matters.
We set out below, together with the material
uncertainty in relation to going concern above, those matters we
considered to be key audit matters.
|
Key audit
matter
|
How our scope
addressed the key audit matter
|
|
1. Carrying
value of intangible assets - (note 9)
The Group holds intangible assets totalling
£7.6m (2023: £7.9m) in relation to the Orom-Cross project in
Uganda. These costs are capitalised in accordance with the
requirements of IFRS 6.
At each reporting date, the directors are
required to assess whether there are any indicators of impairment,
that would require an impairment assessment to be carried out. The
directors concluded there were no indicators of
impairment.
The directors' consideration of the impairment
indicators requires them to make certain judgements, and may
include certain estimates. These matters are considered to make
this a key audit matter.
|
We performed the following procedures as part
of our audit of management's assessment of the carrying value of
intangible assets:
· We obtained and
reviewed the directors' assessment of the indicators of impairment,
as set out in IFRS 6 "Exploration for and evaluation of mineral
resources".
· We assessed the
design and implementation of controls over the impairment
assessment process.
· We obtained
copies of all licenses held by the Group, and performed procedures
to confirm the Group's control of the licenses, that they remain
valid.
· Where the term
of certain exploration licenses had expired, we assessed if
these are expected to be renewed in the normal course of
business.
· We made specific
enquiries of the directors and key staff involved in the
exploration work, and reviewed budgets and forecasts to support the
Group continuing with further exploration work in each of its
license areas.
· We considered
the results of the bulk sampling works completed during the period,
for any matters that may indicate impairment.
· We considered
other matters detailed within IFRS 6 that may give rise to an
indication of impairment.
· We reviewed the
adequacy of disclosures in the financial statements in relation to
the impairment consideration and the impairment charge
recognised.
Based on our work performed, management
recorded an impairment charge of £103,279 relating to exploration
license EL00104. After recording this impairment charge we consider
the directors' final position on impairment, and the financial
statements disclosures to be appropriate.
|
Our audit procedures in relation to these matters
were designed in the context of our audit opinion as a whole. They
were not designed to enable us to express an opinion on these
matters individually and we express no such opinion.
Other information
The other information comprises the
information included in the annual report other than the financial
statements and our auditor's report thereon. The directors are
responsible for the other information contained within the annual
report.
Our opinion on the financial statements does
not cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon. Our responsibility is to read the
other information and, in doing so, consider whether the other
information is materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit, or
otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are
required to determine whether this gives rise to a material
misstatement in the financial statements themselves. If, based on
the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report
that fact.
We have nothing to report in this
regard.
Opinions on
other matters
prescribed by the Companies Act
2006
In our opinion the part of the directors'
remuneration report to be audited has been properly prepared in
accordance with the Companies Act 2006.
In our opinion based on the work undertaken in the
course of our audit:
· the
information given in the strategic report and the directors' report
for the financial year for which the financial statements are
prepared is consistent with the financial statements;
and
· the
directors' report and strategic report have been prepared in
accordance with applicable legal requirements.
Matters on
which we are required to report by exception
In the light of the knowledge and
understanding of the Group and the Company and their environment
obtained in the course of the audit, we have not identified
material misstatements in the strategic report or the directors'
report.
We have nothing to report in respect of the
following matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the
Company, or returns adequate for our audit have not been received
from branches not visited by us; or
· the
Company financial statements and the part of the directors'
remuneration report to be audited are not in agreement with the
accounting records and returns; or
· certain disclosures of directors' remuneration specified by
law are not made; or
· we
have not received all the information and explanations we require
for our audit.
Corporate
governance statement
We have reviewed the directors' statement in
relation to going concern, longer-term viability and that part of
the Corporate Governance Statement relating to the entity's
voluntary compliance with the provisions of the UK Corporate
Governance Statement specified for our review.
Based on the work undertaken as part of our audit,
we have concluded that each of the following elements of the
Corporate Governance Statement is materially consistent with the
financial statements and our knowledge obtained during the
audit:
· Directors' statement with regards the appropriateness of
adopting the going concern basis of accounting and any
material uncertainties identified set out on page 17;
· Directors' explanation
as to their assessment of the Group's prospects, the period this
assessment covers and why they period is appropriate set out on
page 19.
· Directors' statement
on whether they have a reasonable expectation that the Group will
be able to continue in operation and meets its liabilities set out
on page 17;
· Directors' statement
on fair, balanced and understandable set out on page 13;
· Board's confirmation
that it has carried out a robust assessment of the emerging and
principal risks set out on page 5;
· Section of the annual
report that describes the review of effectiveness of risk
management and internal control systems set out on page 17; and
· Section describing the
work of the audit committee set out on page 18.
Responsibilities of
the directors for the financial
statements
As explained more fully in the directors'
responsibilities statement set out on page 13, the directors are
responsible for the preparation of the financial statements and for
being satisfied that they give a true and fair view, and for such
internal control as the directors determine is necessary to enable
the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors
are responsible for assessing the Group's and the Company's ability
to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the
Group or the Company or to cease operations, or have no realistic
alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable
assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and
to issue an auditor's report that includes our opinion. Reasonable
assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect
a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these
financial statements.
Irregularities, including fraud, are instances
of non-compliance with laws and regulations. We design procedures
in line with our responsibilities, outlined above, to detect
material misstatements in respect of irregularities, including
fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
· We obtained an
understanding of the legal and regulatory frameworks that are
applicable to the Group, and the procedures in place for ensuring
compliance. The most significant regulations identified were the
Companies Act 2006, listing rules of the London Stock Exchange and
the requirements of the Group's mining and exploration licenses.
Our work included direct enquiry of the directors, who oversee all
legal proceedings, reviewing Board minutes and inspection of
correspondence.
· We made
enquiries of management, the Audit Committee and the Group's
external legal counsel in Uganda about any litigations and claims
and compliance with local legislation in Uganda.
· We reviewed
management's correspondence with the mining authorities in Uganda
for any instances of non-compliance with laws and
regulations.
· We reviewed
legal expenditure accounts to understand the nature of expenditure
incurred, and to consider any undisclosed instances of
non-compliance.
· We reviewed
board minutes and RNS announcements for any indication of
non-compliance with laws and regulations.
· We communicated
the relevant laws and regulations identified to all members of the
engagement team, and remained alert to any indication of
non-compliance with laws and regulations, or potential fraud,
throughout our audit work.
· As part of our
audit planning process we assessed the different areas of the
financial statements, including disclosures, for the risk of
material misstatement. This included considering the risk of fraud
where direct enquiries were made of management and those charged
with governance concerning both whether they had any knowledge of
actual or suspected fraud and their assessment of the
susceptibility of fraud. We considered the risk was greater in
areas that involve significant management estimate or judgement.
Based on this assessment we designed audit procedures to focus on
the key areas of estimation or judgement, this included risk-based
testing of journal transactions using data analytic software, both
at the year end and throughout the
year.
Owing to the inherent limitations of an audit, there
is an unavoidable risk that some material misstatements of the
financial statements may not be detected, even though the audit is
properly planned and performed in accordance with the ISAs (UK).
The potential effects of inherent limitations are particularly
significant in the case of misstatement resulting from fraud
because fraud may involve sophisticated and carefully organised
schemes designed to conceal it, including deliberate failure to
record transactions, collusion or intentional misrepresentations
being made to us.
A further description of our responsibilities
for the audit of the financial statements is located on the
Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor's report.
Other matters which we are required to
address
We were appointed by the Board of Directors on 14
December 2018 to audit the financial statements for the period
ending 30 September 2018. Our total uninterrupted period of
engagement is seven years, covering the periods ending 30 September
2018 to 30 September 2024.
The non-audit services prohibited by the FRC's
Ethical Standard were not provided to the Group or the Company and
we remain independent of the Group and the Company in conducting
our audit.
Our audit opinion is consistent with the additional
report to the audit committee.
Use
of our
report
This report is made solely to the Company's members,
as a body, in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might state
to the Company's members those matters we are required to state to
them in an auditor's report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company's
members as a body, for our audit work, for this report, or for the
opinions we have formed.
Nick Jones
Senior Statutory Auditor
For and on behalf of
Crowe U.K. LLP
Statutory Auditor
London, U.K.
Date: 30 January 2025
Consolidated Statement of
Comprehensive Income
for the year ended 30 September 2024
|
|
Notes
|
30 Sep 2024
|
30 Sep 2023
|
|
|
|
GBP
|
GBP
|
|
|
|
|
|
|
Exploration
costs
|
|
(23,668)
|
(53,347)
|
|
Impairment of
intangible assets
|
|
(103,279)
|
-
|
|
Administrative fees
and other expenses
|
5
|
(789,707)
|
(1,298,872)
|
|
Operating loss
|
|
(916,654)
|
(1,352,219)
|
|
|
|
|
|
|
Finance
costs
|
15
|
(44,987)
|
(45,748)
|
|
Loss before tax
|
|
(961,641)
|
(1,397,967)
|
|
|
|
|
|
|
Taxation
|
8
|
-
|
-
|
|
|
|
|
|
|
Loss for the year attributable to owners
of the parent
|
|
(961,641)
|
(1,397,967)
|
|
|
|
|
|
|
Other comprehensive
income
|
|
|
|
|
Items that may be
reclassified to profit or loss:
|
|
|
|
|
Exchange differences
on translation of foreign operation:
|
|
58,840
|
31,282
|
|
Other comprehensive income, net of
tax
|
|
58,840
|
31,282
|
|
|
|
|
|
|
Total comprehensive loss attributable to
owners of the parent
|
|
(902,801)
|
(1,366,685)
|
|
|
|
|
|
|
Basic and diluted loss per share
(pence)
|
10
|
(0.45)
|
(0.70)
|
Consolidated Statement of Financial Position
as at 30 September 2024
|
|
Notes
|
30 Sep 2024
|
Restated
30 Sep 2023
|
|
|
|
GBP
|
GBP
|
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
Intangible
assets
|
9
|
7,603,793
|
7,863,650
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
Trade and other
receivables
|
13
|
24,442
|
31,863
|
|
Cash and cash
equivalents
|
|
114,694
|
129,853
|
|
Total current assets
|
|
139,136
|
161,716
|
|
|
|
|
|
|
Total assets
|
|
7,742,929
|
8,025,366
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
Creditors: Amounts
falling due within one year
|
14
|
(1,020,375)
|
(1,335,255)
|
|
Surface
liabilities
|
15
|
(134,953)
|
-
|
|
Total current
liabilities
|
|
(1,155,328)
|
(1,335,255)
|
|
|
|
|
|
|
Non-current
liabilities
|
|
|
|
|
Surface
liabilities
|
15
|
(794,183)
|
(818,915)
|
|
|
|
|
|
|
Total liabilities
|
|
(1,949,511)
|
(2,154,170)
|
|
|
|
|
|
|
Net assets
|
|
5,793,418
|
5,871,196
|
|
|
|
|
|
|
Equity
|
|
|
|
|
Share
capital
|
16
|
1,423,759
|
1,338,566
|
|
Share
premium
|
16
|
9,377,229
|
8,637,399
|
|
Share options
reserve
|
|
428,342
|
428,342
|
|
Translation
reserve
|
2.9ii
|
89,579
|
30,739
|
|
Accumulated
losses
|
|
(5,525,491)
|
(4,563,850)
|
|
Total equity
|
|
5,793,418
|
5,871,196
|
These financial statements were approved by
the Board of Directors and authorised for issue on 30 January 2025
and signed on its behalf by:
Cameron Pearce
Sam
Quinn
Director
Director
Parent Statement of Financial Position as at
30 September 2024
|
|
|
|
|
|
|
Notes
|
30 Sep 24
|
Restated
30 Sep 23
|
|
|
|
|
GBP
|
GBP
|
|
|
|
|
|
|
|
|
Fixed
assets
|
|
|
|
|
|
Investment in subsidiaries
|
11
|
6,287,027
|
6,287,027
|
|
|
Other
fixed assets
|
12
|
676,950
|
671,905
|
|
|
Total fixed
assets
|
|
6,963,977
|
6,958,932
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Trade and
other receivables
|
13
|
415,525
|
342,197
|
|
|
Cash and
cash equivalents
|
|
114,694
|
129,853
|
|
|
Total current
assets
|
|
530,219
|
472,050
|
|
|
|
|
|
|
|
|
Total
assets
|
|
7,494,196
|
7,430,982
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Creditors: Amounts falling due within one year
|
14
|
(588,873)
|
(826,954)
|
|
|
Total current
liabilities
|
|
(588,873)
|
(826,954)
|
|
|
|
|
|
|
|
|
Net assets
|
|
6,905,323
|
6,604,028
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Share
capital
|
16
|
1,423,759
|
1,338,566
|
|
|
Share
premium
|
16
|
9,377,229
|
8,637,399
|
|
|
Share
options reserve
|
|
428,342
|
428,342
|
|
|
Accumulated losses
|
|
(4,324,007)
|
(3,800,279)
|
|
|
Total
equity
|
|
6,905,323
|
6,604,028
|
|
|
|
|
|
|
The Company has taken advantage of the
exemption allowed under section 408 of the Companies Act 2006 and
has not presented its own Statement of Comprehensive Income in
these financial statements. The loss after tax of the parent
company for the year was £523,728 (2023: loss of
£653,348).
The Financial Statements were approved and
authorised for issue by the Board of Directors on 30 January 2025
and were signed on its behalf by:
Cameron
Pearce
Sam Quinn
Director
Director
Consolidated Statement of Changes in Equity
for the year ended 30 September 2024
|
|
Share
capital
|
Share premium
|
Share options reserve
|
Translation reserve
|
Accumulated losses
|
Total equity
|
|
|
GBP
|
GBP
|
GBP
|
GBP
|
GBP
|
GBP
|
|
|
|
|
|
|
|
|
|
Balance as at 30 Sep
2022
|
1,181,316
|
7,480,829
|
402,148
|
(543)
|
(3,165,883)
|
5,897,867
|
|
|
|
|
|
|
|
|
|
Loss for the
year
|
-
|
-
|
-
|
-
|
(1,397,967)
|
(1,397,967)
|
|
Exchange differences
on translation of foreign operations
|
-
|
-
|
-
|
31,282
|
-
|
31,282
|
|
Total comprehensive
loss
|
-
|
-
|
-
|
31,282
|
(1,397,967)
|
(1,366,685)
|
|
|
|
|
|
|
|
|
|
Transactions with
owners
|
|
|
|
|
|
|
|
New shares issued
(note 16)
|
157,250
|
1,227,750
|
-
|
-
|
-
|
1,385,000
|
|
Share issue costs
(note 16)
|
-
|
(71,180)
|
-
|
-
|
-
|
(71,180)
|
|
Share based payment
charge
|
|
-
|
26,194
|
-
|
-
|
26,194
|
|
Total transactions with
owners
|
157,250
|
1,156,570
|
26,194
|
-
|
-
|
1,340,014
|
|
|
|
|
|
|
|
|
|
Balance as at 30 Sep
2023
|
1,338,566
|
8,637,399
|
428,342
|
30,739
|
(4,563,850)
|
5,871,196
|
|
|
|
|
|
|
|
|
|
Loss for the
year
|
-
|
-
|
-
|
-
|
(961,641)
|
(961,641)
|
|
Exchange differences
on translation of foreign operations
|
-
|
-
|
-
|
58,840
|
-
|
58,840
|
|
Total comprehensive
loss
|
-
|
-
|
-
|
58,840
|
(961,641)
|
(902,801)
|
|
|
|
|
|
|
|
|
|
Transactions with
owners
|
|
|
|
|
|
|
|
New shares issued
(note 16)
|
85,193
|
766,733
|
-
|
-
|
-
|
851,926
|
|
Share issue costs
(note 16)
|
-
|
(26,903)
|
-
|
-
|
-
|
(26,903)
|
|
|
|
|
|
|
|
|
|
Total transactions with
owners
|
85,193
|
739,830
|
-
|
-
|
-
|
825,023
|
|
|
|
|
|
|
|
|
|
Balance as at 30 Sep
2024
|
1,423,759
|
9,377,229
|
428,342
|
89,579
|
(5,525,491)
|
5,793,418
|
Parent Statement of Changes in Equity for the
year ended 30 September 2024
|
|
Share
capital
|
Share premium
|
Share option reserve
|
Accumulated losses
|
Total equity
|
|
|
GBP
|
GBP
|
GBP
|
GBP
|
GBP
|
|
|
|
|
|
|
|
|
Balance as at 30 Sep
2022
|
1,181,316
|
7,480,829
|
402,148
|
(3,146,931)
|
5,917,362
|
|
|
|
|
|
|
|
|
Loss for the
year
|
-
|
-
|
-
|
(653,348)
|
(653,348)
|
|
Total comprehensive
loss
|
-
|
-
|
-
|
(653,348)
|
(653,348)
|
|
|
|
|
|
|
|
|
Total transactions with
owners
|
|
|
|
|
|
|
New shares issued
(note 16)
|
157,250
|
1,227,750
|
-
|
-
|
1,385,000
|
|
Share issue costs
(note 16)
|
-
|
(71,180)
|
-
|
-
|
(71,180)
|
|
Share based payment
charge
|
-
|
-
|
26,194
|
-
|
26,194
|
|
|
|
|
|
|
|
|
Total transactions with
owners
|
157,250
|
1,156,570
|
26,194
|
-
|
1,340,014
|
|
|
|
|
|
|
|
|
Balance as at 30 Sep
2023
|
1,338,566
|
8,637,399
|
428,342
|
(3,800,279)
|
6,604,028
|
|
|
|
|
|
|
|
|
Loss for the
year
|
-
|
-
|
-
|
(523,728)
|
(523,728)
|
|
Total comprehensive
loss
|
-
|
-
|
-
|
(523,728)
|
(523,728)
|
|
|
|
|
|
|
|
|
Total transactions with
owners
|
|
|
|
|
|
|
New shares issued
(note 16)
|
85,193
|
766,733
|
-
|
-
|
851,926
|
|
Share issues costs
(note 16)
|
-
|
(26,903)
|
-
|
-
|
(26,903)
|
|
|
|
|
|
|
|
|
Total transactions with
owners
|
85,193
|
739,830
|
-
|
-
|
825,023
|
|
|
|
|
|
|
|
|
Balance as at 30 Sep
2024
|
1,423,759
|
9,377,229
|
428,342
|
(4,324,007)
|
6,905,323
|
Consolidated Statement of Cash Flows for the
year ended 30 September 2024
|
|
Notes
|
30 Sep 2024
|
30 Sep 2023
|
|
|
|
GBP
|
GBP
|
|
Operating activities
|
|
|
|
|
Loss after
tax
|
|
(961,641)
|
(1,397,967)
|
|
Finance
costs
|
|
44,987
|
45,748
|
|
Impairment
|
|
103,279
|
-
|
|
Share based
payment
|
17
|
-
|
26,194
|
|
Unrealised currency
translation
|
|
204,739
|
182,264
|
|
Changes in working
capital
|
|
|
|
|
Decrease in trade and
other receivables
|
|
7,422
|
53,984
|
|
(Decrease)/increase
in trade and other payables
|
|
(139,893)
|
272,664
|
|
Net cash flows utilised by operating
activities
|
|
(741,107)
|
(817,113)
|
|
|
|
|
|
|
Cash flows from investing
activities
|
|
|
|
|
Government grant
|
9
|
2,787,090
|
-
|
|
Investment in exploration assets
|
9
|
(2,846,130)
|
(713,848)
|
|
Net cash flows utilised by
investing activities
|
|
(59,040)
|
(713,848)
|
|
|
|
|
|
|
Cash flows from financing
activities
|
|
|
|
|
Shares issued (net of
issue cost)
|
16
|
784,988
|
1,313,820
|
|
Net cash flows from financing
activities
|
|
784,988
|
1,313,820
|
|
|
|
|
|
|
Decrease in cash and cash
equivalents
|
|
(15,159)
|
(217,141)
|
|
|
|
|
|
|
Cash and cash
equivalents at the beginning of the year
|
|
129,853
|
346,994
|
|
|
|
|
|
|
Cash and cash equivalents at the end of
the year
|
|
114,694
|
129,853
|
Net debt
note
|
|
Cash at bank
and in hand
|
Surface
Liability
|
Total
|
|
|
GBP
|
GBP
|
GBP
|
|
At 1 October 2022
|
346,994
|
(978,255)
|
(631,261)
|
|
Cash flows
|
(217,141)
|
-
|
(217,141)
|
|
Other non-cash changes
|
-
|
159,340
|
159,340
|
|
As 30 September 2023
|
129,853
|
(818,915)
|
(689,062)
|
|
|
|
|
|
|
As 1 October 2023
|
129,853
|
(818,915)
|
(689,062)
|
|
Cash flows
|
(15,159)
|
-
|
(15,159)
|
|
Other non-cash changes
|
-
|
(110,221)
|
(110,221)
|
|
As 30 September 2024
|
114,694
|
(929,136)
|
(814,442)
|
Parent Statement of Cash Flows for the year
ended 30 September 2024
|
|
|
30 Sep 2024
|
30 Sep 2023
|
|
|
|
|
|
|
|
Notes
|
GBP
|
GBP
|
|
Operating activities
|
|
|
|
|
Loss after
tax
|
|
(523,728)
|
(653,348)
|
|
Less finance
income
|
|
(79,881)
|
(55,873)
|
|
Increase in bad debt
provision
|
12,13
|
31,289
|
11,742
|
|
Share based
payment
|
17
|
-
|
26,194
|
|
Changes in working
capital
|
|
|
|
|
Increase in trade and
other receivables
|
|
(73,328)
|
(27,167)
|
|
Decrease in trade and
other payables
|
|
(198,046)
|
(58,641)
|
|
Net cash flows from operating
activities
|
|
(843,694)
|
(757,093)
|
|
|
|
|
|
|
Cash flows from investing
activities
|
|
|
|
|
Loan
advanced to subsidiary
|
|
(472,553)
|
(105,828)
|
|
Government grant
|
|
2,787,090
|
-
|
|
Investment in subsidiary, relating to exploration costs
paid
|
11
|
(2,270,990)
|
(668,040)
|
|
Net cash flows used in
investing activities
|
|
43,547
|
(773,868)
|
|
|
|
|
|
|
Cash flows from financing
activities
|
|
|
|
|
Shares issued (net of
issue cost)
|
16
|
784,988
|
1,313,820
|
|
Net cash flows from financing
activities
|
|
784,988
|
1,313,820
|
|
|
|
|
|
|
Decrease in cash and cash
equivalents
|
|
(15,159)
|
(217,141)
|
|
|
|
|
|
|
Cash and cash
equivalents at the beginning of the year
|
|
129,853
|
346,994
|
|
|
|
|
|
|
Cash and cash equivalents at the end of
the year
|
|
114,694
|
129,853
|
Notes to the Financial Statements for the year ended 30
September 2024
1. General
Blencowe Resources Plc (the "Company") is a
public limited company incorporated and registered in England and
Wales with registered company number 10966847. Its registered
office is situated at 167-169 Great Portland Street, Fifth Floor
London, W1W 5PF.
The Group did not earn any trading income during
the year under review but incurred expenditure associated
with financing and operation of the Group and
developing its principal assets.
2. Accounting policies
2.1 Basis of
preparation
The principal accounting policies applied in the
preparation of the Company and Group's Financial Statements are set
out below. These policies have been consistently applied to the
periods presented, unless otherwise stated.
The Company and Group's Financial Statements
have been prepared in accordance with UK adopted international
accounting standards ("IFRS").
The Group's Financial Statements are presented
in GBP, which is the Company's functional currency. All amounts
have been rounded to the nearest pound, unless otherwise
stated.
Prior year adjustment
The Consolidated and Parent statements of
financial position have been restated to recognise exploration
expenditure in relation to a material invoice of £259,086 that was
received several months after the prior year end, relating to works
done in the year ended 30 September 2023. This resulted in an
increase of this amount to intangible assets and trade payables in
the Group accounting records, and in the Parent, accounting records
an increase to investment in subsidiary and trade payables of this
amount (Note 9,11 and 14). There is no impact to the statement of
comprehensive income. As the invoice does not affect the opening
position at 1 October 2022, a second comparative statement of
financial position has not been presented.
2.2 Basis of
consolidation
The Consolidated Financial Statements comprise
the financial statements of the Company and its subsidiaries
Consolidated African Resources Limited ("CARU") and Blencowe
Battery Mines Uganda - SMC Limited.
Subsidiaries are fully consolidated from the
date of acquisition, being the date on which the Group obtains
control. Control is achieved when the Group is exposed, or
has rights, to variable returns from its involvement with the
investee and has the ability to affect those returns through its
power over an investee, including:
•
the contractual arrangement with the other vote holders of the
investee;
•
rights arising from other contractual arrangements; and
•
the Group's voting rights and potential voting rights
The Group re-assesses whether or not it controls
an investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control.
Subsidiaries are fully consolidated from the date on which control
is transferred to the Group. They are deconsolidated from the date
that control ceases. Assets, liabilities, income and expenses of a
subsidiary acquired or disposed of during the period are included
in the Group Financial Statements from the date the Group gains
control until the date the Group ceases to control the
subsidiary.
All intra-group balances, transactions, income
and expenses and profits and losses resulting from intra-group
transactions that are recognised, are eliminated in
full.
2.3 Going concern
At 30 September 2024, the Group had £7,742,929
of total assets (2023: £8,025,366), of which £114,694 are held as
cash and cash equivalents (2023: £129,853).
In making an assessment of going concern for the
Group and Company, the Board of Directors have reviewed cash flow
forecasts covering a period of 12 months from the date these
financial statements were approved, and have concluded that it is
appropriate to prepare the financial statements on a going concern
basis.
The Company has successfully agreed a US$5
million grant through the US Development Finance Corporation (DFC).
This funding is being provided in a number of tranches aligned to
completion of works related to the Definitive Feasibility Study,
with $3.5m of this funding having been advanced as of 30 September
2024. As the DFC grant does not cover the entirety of the
Definitive Feasibility Study costs, further funding in addition to
the amounts already raised after the year end will be required
during the going concern assessment period. Management will pursue
options for this funding including share placements and other
potential sources. Details on the funds raised from equity
transactions subsequent to the year end are detailed in note
20.
These conditions indicate the existence of a
material uncertainty, which may cast doubt over the Group's and
Company's ability to continue as a going concern. The financial
statements do not include adjustments that would arise in the event
of the Group and Company not being able to continue as a going
concern.
2.4 Changes in material
accounting policies
The Group and Company have adopted all new IFRS
and amendments to IFRS applicable for this period. There has been
no change to the Group's accounting policies as a result, and no
other material impact to the financial statements.
2.5 Standards,
amendments and interpretations to published standards not yet
effective
The Directors have reviewed the IFRS standards
in issue but not in effect as of the period end. In their view,
none of these standards would have a material impact on the
financial statements of the Group.
2.6 Intangible assets
Exploration
and evaluation assets
The Group recognises expenditure as exploration
and evaluation assets when it determines that those assets will be
successful in finding specific mineral resources. Expenditure
included in the initial measurements of exploration and evaluation
assets and which are classified as intangible assets relate to the
acquisition of rights to explore, exploratory drilling, sampling
and activities to evaluate the technical feasibility and commercial
viability of extracting a mineral resource. Capitalisation of
pre-production expenditure ceases when the mining property is
capable of commercial production.
Impairment
Exploration and evaluation assets are not
subject to amortisation until production commences but are assessed
for impairment when an event or trigger requires an assessment to
be carried out. The assessment is carried out by allocating
exploration and evaluation assets to cash generating units
("CGU's"), which are based on specific projects or license areas.
Currently there is one minng license relating to the Orom-Cross
Project, with a number of nearby exploration licenses. Whenever the
exploration for and evaluation of mineral resources in cash
generating units does not lead to the discovery of commercially
viable quantities of mineral resources and the Group has decided to
discontinue such activities of that unit, the associated
expenditures are written off to the Statement of Comprehensive
Income.
2.7 Financial
instruments
A financial instrument is any contract that
gives rise to a financial asset of one entity and a financial
liability or equity instrument of another.
(i) Financial assets
Financial assets are classified at initial
recognition. The classification of financial assets at
initial recognition that are debt instruments depends on the
financial asset's contractual cash flow characteristics and the
Group's business model for managing them. The Group initially
measures a financial asset at its fair value plus, in the case of a
financial asset not at fair value through profit or loss,
transaction costs.
In order for a financial asset to be classified
and measured at amortised cost, it needs to give rise to cash flows
that are 'solely payments of principal and interest (SPPI)' on the
principal amount outstanding. This assessment is referred to as the
SPPI test and is performed at an instrument level.
Classification and measurement is based on both
whether contractual cash flows are solely payments of principal and
interest; and whether the debt instrument is held to collect those
cash flows. In the case of the Group, all financial assets meet
this criteria and they are held at amortised cost.
Impairment of financial
assets
IFRS 9's impairment requirements use more
forward-looking information to recognise expected credit losses -
the ECL model.
ECLs are based on the difference between the
contractual cash flows due in accordance with the contract and all
the cash flows that the Company expects to receive, discounted at
the original effective interest rate. The expected cash flows will
include cash flows from the sale of collateral held or other credit
enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit
exposures for which there has not been a significant increase in
credit risk since initial recognition, ECLs are provided for credit
losses that result from default events that are possible within the
next 12 months (a '12-month ECL'). For those credit exposures for
which there has been a significant increase in credit risk since
initial recognition, a loss allowance is required for credit losses
expected over the remaining life of the exposure, irrespective of
the timing of the default (a 'lifetime ECL').
For the Company's receivables from its
subsidiary, management have assessed a 12 month ECL at 5% to be
appropriate for the current year.
(ii) Financial
liabilities
Financial liabilities are classified, at initial
recognition, as financial liabilities at amortised cost. The
Group's financial liabilities include trade and other payables and
surface liabilities.
Subsequent measurements
Surface
liabilities and trade and other
payables.
After initial recognition, surface liabilities
and trade and other payables are subsequently measured at amortised
cost using the effective interest rate method. Gains and losses are
recognised in the statement of profit or loss when the liabilities
are derecognised, as well as through the effective interest rate
amortisation process.
Amortised cost is calculated by taking into
account any discount or premium on acquisition and fees or costs
that are an integral part of the effective interest rate. The
effective interest rate amortisation is included as finance costs
in the statement of profit or loss.
2.8 Share capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares
or options are shown in equity as a deduction, net of tax, from
proceeds.
Warrants
Warrant options have classified as equity
since they meet the definition of IAS 32 as equity.. The fair
value of the warrants has been calculated using the Black-Scholes
option pricing model. For more information, please see note
17.
Share
options
The Group accounts for the equity-settled
share options it has issued in accordance with IFRS 2. The share
options are recognised at their fair value at the date of grant.
The total share based payment charge expensed is recognised over
the vesting period, which is the period over which performance
conditions are to be satisfied. The fair value is calculated using
the Black-Scholes option pricing model, adjusted for the
probability of meeting market based vesting conditions where these
are included. The inputs used in the model are based on
management's best estimate.
No expense is recognised for options that do
not ultimately vest, except for awards where vesting is conditional
on a market condition or non-vesting condition, which are treated
as vesting irrespective of whether or not the market or non-vesting
condition is satisfied, provided all other performance or service
conditions are satisfied.
2.9 Foreign currency
translation
(i) Functional and presentation currency
Items included in the financial statements of
each of the group's entities are measured using the currency of the
primary economic environment in which the entity operates ('the
functional currency'). The consolidated financial statements are
presented in Great British Pounds currency (GBP).
(ii) Transactions and balances
Foreign currency transactions are translated
into the functional currency using the exchange rates at the dates
of the transactions. Monetary assets and liabilities
denominated in foreign currencies at the reporting date are
retranslated to the functional currency at the exchange rate at
that date. Foreign exchange gains and losses
resulting from the settlement of such transactions, and from the
translation of monetary assets and liabilities denominated in
foreign currencies at year end exchange rates, are generally
recognised in profit or loss.
Non-monetary items in a foreign currency that
are measured in terms of historical cost are translated using the
exchange rate at the date of the transaction. Foreign
currency differences arising on the consolidation of the Group's
companies are accumulated in the translation reserve. The
Company's subsidiaries Consolidated African Resources
Limited and Blencowe Battery Mines Uganda SMC Limited,
whose functional currency is USD.
2.10 Earnings per share
The Company presents basic and, when
appropriate, diluted earnings per share ("EPS") data for its
Ordinary Shares. Basic EPS is calculated by dividing the profit or
loss attributable to ordinary shareholders of the Company by the
weighted average number of Ordinary Shares outstanding during the
year. Diluted EPS is calculated by adjusting the earnings and
number of shares for the effects of dilutive potential Ordinary
Shares.
2.11 Income tax
Income tax expense comprises current tax and
deferred tax.
Current
income tax
A 19% rate of corporate income tax applies to
the Company. From 1 April 2023 the main corporation tax increased
from 19% to 25%, and a new 19% small profits rate of corporation
tax was introduced for companies whose profits do not exceed
£50,000.
Deferred
income tax
Deferred tax is recognised in profit or loss
except to the extent that it relates to a business combination, or
items recognised directly in equity or in other comprehensive
income. Deferred income tax is recognised on temporary
differences arising between the tax bases of assets and liabilities
and their carrying amounts in the Financial Statements. Deferred
income tax assets and liabilities are measured on an undiscounted
basis at the tax rates that are expected to apply to the period
when the related asset is realised or the liability is settled,
based on tax rates (and tax laws) that have been enacted or
substantively enacted at the date of the Consolidated Statement of
Financial Position.
2.12 Investment in subsidiary
Investments in subsidiary are measured at cost
less impairment. The investment in subsidiary balance includes any
exploration costs paid on behalf of the subsidiary. The balance
also includes the impact of the government grant received from the
US Government. Refer to Note 2.14.
2.13 Cash and cash
equivalents
Cash and cash equivalents in the Company and
Group statements of financial position comprise bank balances
only.
2.14 Government grants
Government grants are recognised once the
entity has complied with conditions attaching to the government
grant and the grant funds have been received. Government grants are
accounted for using the capital approach. Under this
approach, the grant funds are recognised outside the statement of
comprehensive income. Government grants related to intangible
assets, shall be presented in the statement of financial position
by deducting the grant funds from the intangible asset in arriving
at the carrying amount of the intangible asset. The grant funds are
recognised in the statement of comprehensive income over the life
of a depreciable asset as a reduced depreciation
expense.
3. Critical accounting estimates and
judgements
In preparing the Company and Group Financial
Statements, the Directors are required to make judgements,
estimates and assumptions that affect the amounts reported. These
estimates and judgements are continually reviewed and are based on
experience and other factors, including expectations of future
events that are believed to be reasonable under the
circumstances.
Accounting estimates and assumptions are made
concerning the future and, by their nature, may not
accurately reflect the related actual outcome.
There are no key assumptions and other sources of estimation
uncertainty that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within
the next financial year.
Critical accounting
estimates
Interest
charge on amounts falling after one year
At year end, the NPV of the liability for
surface rights to the owners of the land was £929,136 (2023:
£818,915). Interest is charged on the liabilities at a rate of 5%,
if the discount rate used to calculate the present value of the
liabilities was to increase by 1%, the carrying value of the
surface rights liability would increase by around £36,685 (2023:
£34,506). The interest charged during the year was for the surface
rights was £61,687 (2023: £45,748), if the rate was increased by 1%
then the interest charge would increase by approximately £6,168
(2023: £6,235). For further information on the lease, please see
note 15.
Critical accounting
judgements
Impairment of
intangible assets - exploration and evaluation
costs
IFRS 6 requires entities recognising
exploration and evaluation assets to perform an impairment test on
those assets when specific facts and circumstances indicate an
impairment test is required. The assessment involves judgement as
to the status of licenses and the likelihood of renewal of
exploration licenses which expire in the near future. The directors
also make a judgement on the ability to meet license obligations,
budgets and plans for future exploration activity, the results of
that exploration activity, and to assess the recoverability of the
capitalised exploration and evaluation costs on development of the
project.
Surface
Iiability
Management are required to make judgements on
when the terms of certain instalment payments under the surface
rights agreement are met. The value of the surface liability is
measured at the present value of the estimated payments due to the
Landowner's Association over the lease term. If the payments for
which judgement is required were made one year later the difference
in the liability to the Landowners would decrease by
£3,161.
Going
concern
In their assessment of going concern, the
Directors have prepared cash flow forecast showing the Groups'
expected future expenditure. The Directors were required to make
estimates and judgements over future cash flows and funding. For
further information about the Group's going concern, please see
note 2.3.
4. Operating segment
activities
The Group is engaged in the business of
mining. At this stage in the Group's development, the
Group is focusing on financing and continued development of the
Orom-Cross Graphite Project
in Uganda. This is considered to be the only operating
segment.
5. Administrative fees and other
expenses
|
|
30 Sep 2024
|
30 Sep 2023
|
|
|
GBP
|
GBP
|
|
Directors' remuneration
(see note 6)
|
153,556
|
140,051
|
|
Professional fees
|
129,617
|
226,471
|
|
Salaries (see note 7)
|
150,000
|
150,000
|
|
Listing fees
|
43,238
|
41,123
|
|
Audit fees
|
42,000
|
35,000
|
|
Share option/warrant cost
(see note 17)
|
-
|
26,194
|
|
Administration fees
|
47,000
|
47,000
|
|
Broker fees
|
33,241
|
41,000
|
|
Travelling expenses
|
16,395
|
16,852
|
|
Ugandan taxes (note 8)
|
-
|
392,425
|
|
Miscellaneous fees
|
42,884
|
72,625
|
|
Foreign currency loss
|
131,776
|
110,131
|
|
Total
|
789,707
|
1,298,872
|
Key management remuneration, together with any
share-based payments, are disclosed in note 7.
6. Directors' remuneration
|
|
30 Sep 2024
|
30 Sep 2023
|
|
|
GBP
|
GBP
|
|
Base fees
|
151,500
|
138,000
|
|
Employer NI
|
2,056
|
2,051
|
|
Share based payments
|
-
|
13,097
|
|
Total
|
153,556
|
153,148
|
7. Key management
personnel
The number of key management (excluding members
the Board) employees throughout the year was as follows;
|
|
30 Sep 2024
|
30 Sep 2023
|
|
By the Company
|
2
|
2
|
|
By the Group
|
2
|
2
|
The key management employees who served during
the year, together with details of their interest in the shares of
the Company as at the reporting date were:
|
|
Number of shares
|
Value of the shares 30 Sep 2024
|
|
Michael Ralston - CEO
|
3,225,000
|
£177,375
|
|
Iain Wearing - COO
|
408,333
|
£22,458
|
|
|
Number of shares
|
Value of the shares
30 Sep 2023
|
|
Michael Ralston - CEO
|
3,225,000
|
£188,950
|
|
Iain Wearing - COO
|
408,333
|
£22,500
|
The total base salary costs recognised as an
expense for the year was £150,000 (2023: £150,000). A further
£90,000 (2023: £90,000) was capitalised as they are related to the
Orom-Cross Graphite Project. Total share-based payments for the
year were nil (2023: £13,097). There was no other
component of compensation.
8. Taxation
|
Analysis of charge in the year
|
30 Sep 2024
|
30 Sep 2023
|
|
|
GBP
|
GBP
|
|
Current tax:
|
|
|
|
UK Corporation tax on loss
for the year
|
-
|
-
|
|
Deferred tax
|
-
|
-
|
|
Tax on loss
|
-
|
-
|
|
|
30 Sep 2024
|
30 Sep 2023
|
|
|
GBP
|
GBP
|
|
Loss before tax
|
(961,641)
|
(1,397,967)
|
|
Tax credit at 19%
|
(182,711)
|
(265,614)
|
|
Tax effect of expenses not
deductible for tax
|
22,914
|
24,993
|
|
Tax losses for which no
deferred tax asset is recognised
|
159,797
|
240,621
|
|
Taxation charge for the
year
|
-
|
-
|
|
|
|
|
The Parent Company has accumulated tax losses
arising in the UK of £3,405,762 (2023: £3,002,632) that are
available, under current legislation, to be carried forward against
future profits.
Following an inspection by the Ugandan tax
authorities of the tax affairs of CARU covering the period between
January 2014 and December 2022, the Group incurred a capital gains
tax charge of £392,425. This related to the acquisition by the
Company of CARU in 2019. The amount was chargeable to the
former owners, however this was not settled by them and under
Ugandan legislation the liability is reclaimable from the acquirer
if it cannot be obtained from the seller. This amount was included
within administrative expenses in the financial year 2023, as it
does not relate to the profits or gains made by the Group. Please
refer to note 5.
9. Intangible and other assets
For the year ended 30 September 2024 intangible
assets represent only capitalised costs associated with the Group's
exploration, evaluation and development of mineral
resources.
|
Group
|
Exploration assets
|
Government Grant
|
Total
|
|
|
GBP
|
GBP
|
GBP
|
|
Balance at 30
September 2022
|
6,615,253
|
-
|
6,615,253
|
|
Additions - during
the year
|
1,450,063
|
-
|
1,450,063
|
|
Exchange
differences
|
(201,666)
|
-
|
(201,666)
|
|
Balance at 30
September 2023 (Restated)
|
7,863,650
|
-
|
7,863,650
|
|
Additions - during
the year
|
2,846,130
|
-
|
2,846,130
|
|
Impairment
|
(103,279)
|
|
(103,279)
|
|
Government
grant
|
-
|
(2,787,090)
|
(2,787,090)
|
|
Exchange
differences
|
(215,618)
|
-
|
(215,618)
|
|
Balance at 30
September 2024
|
10,390,883
|
(2,787,090)
|
7,603,793
|
Intangible assets have been restated due to an
invoice that was received post year end for £259,086 and this is
above the materiality level.
Additions during the year represent
exploration costs at Orom-Cross Graphite
Project.
Management performed a review for indications of
impairment as at 30 September 2024 and concluded impairment was
required for exploration license EL00104 which had expired and
could not be renewed further. Management have applied for a new
exploration license covering a similar area to EL00104 and this is
currently being assessed by the licensing authorities.
The company signed a US$5 million agreement with
the U.S. International Development Finance Corporation ("DFC") in
order to provide substantial funding for the Orom Cross Definitive
Feasibility Study programme, via a Technical Assistance Grant
("TAG"). The DFC is a proxy for the US Government which funds the
organisation and ultimately sets its vision, parameters and funding
distribution. DFC payments will be made upon as agreed feasibility
study milestones are achieved. As part of the US$5 million
Technical Assistance Grant ("TAG") the DFC has a right of first
refusal on commercial terms to arrange project financing for the
Orom-Cross project, which may deliver Blencowe with a full funded
solution to bring Orom-Cross into production with support from a
major financial institution. The agreement is subject to various
events of default.
10. Loss per share
The calculation of the basic and diluted loss
per share is based on the following data:
|
|
30 Sep 2024
|
30 Sep 2023
|
|
Earnings
|
|
|
|
Loss from continuing
operations for the year attributable to the equity holders of the
Company (£)
|
(961,641)
|
(1,397,967)
|
|
Number of shares
|
|
|
|
Weighted average
number of Ordinary Shares for the purpose of basic and diluted
earnings per share
|
216,036,425
|
200,041,594
|
|
Basic and diluted loss per share
(pence)
|
(0.45)
|
(0.70)
|
11. Investment in subsidiaries
Details of the Company's subsidiary at 30
September 2024 are as follows:
|
Name of the subsidiary
|
Place of incorporation
|
Portion of ordinary shares held
|
Principal activity
|
|
Consolidated African
Resources Limited
|
Uganda
|
100%
|
Exploration
|
|
Blencowe Battery
Mines Uganda - SMC Limited
|
Uganda
|
100%
|
Mining Extraction
|
|
|
30 Sep 2024
GBP
|
Restated
30 Sep 2023
GBP
|
|
|
Investments in
subsidiary
|
|
|
|
|
Investments at the
beginning of the year as previously stated
|
6,287,027
|
4,892,924
|
|
|
Additions during the
year
|
2,270,990
|
1,394,103
|
|
|
Government
grant
|
(2,270,990)
|
-
|
|
|
Total investment in
subsidiary
|
6,287,027
|
6,287,027
|
|
|
|
|
|
|
| |
The investment in subsidiary at 30 September
2023 have been restated because of an investment amount of £259,086
paid by the Parent on behalf of the Subsidiary for project
costs.
The Group's new subsidiary Blencowe
Battery Mines Uganda - SMC Limited had no significant transactions
during the year.
As described in note 9, the Company received
amounts totalling £2,787,090 as a grant from the U.S. International
Development Finance Corporation ("DFC") relating to expenditure
incurred on the Orom Cross Definitive Feasibility Study programme.
Of the total expenditure, £2,279,990 was incurred by the parent
company and recognised as an increase in its investment in the
subsidiary Consolidated Africa Resources Limited ("CARU"). The
remaining amount was incurred by CARU and recognised as an increase
to the intercompany loan with the parent company (note 12). The
grant receipts have accordingly been recorded in the parent company
accounts to offset the relevant Feasibility Study costs included in
the investment value and the intercompany loan.
12. Other fixed assets
|
|
30 Sep 2024
|
Restated
30 Sep 2023
|
|
|
Group
|
Company
|
Group
|
Company
|
|
|
GBP
|
GBP
|
GBP
|
GBP
|
|
|
|
|
|
|
|
Loan to subsidiaries (see
below)
|
-
|
739,352
|
-
|
707,268
|
|
Less: ECL provision
|
-
|
(62,402)
|
-
|
(35,363)
|
|
Total
|
-
|
676,950
|
-
|
671,905
|
On 18 December 2020 the Company and its
subsidiary entered into a loan agreement. The facility is for an
amount up to £5,000,000 and carries a base interest of 5% plus Bank
of England interest rate per annum chargeable at year end. The loan
is considered to be a long-term asset.
During the year, the Company agreed to cover
some expenses for Consolidated African Resources Limited (CARU) for
the value of £575,140 (2023: £96,051). The amount borrowed at the
year end was £736,760 (2023: £589,062). The total interest charged
for the year ended 30 September 2024 is £79,448 (2023: £55,873).
The interest payable at the year end was £197,655 (2023:
£118,206).
The value of the loan is subject to 12 months
ECL of 5%, representing the possible default events over the next
12 months of the financial instrument. Due to the increase of
expenses paid by the Company on behalf of CARU, the loan and its
interest has increased, this has led to an increase in the
provision during the year.
|
|
30 Sep 2024
|
30 Sep 2023
|
|
|
Group
|
Company
|
Group
|
Company
|
|
|
GBP
|
GBP
|
GBP
|
GBP
|
|
Brought forward ECL
provision
|
-
|
35,363
|
-
|
27,471
|
|
Provision expense
|
-
|
27,039
|
-
|
7,892
|
|
Carried forward ECL provision
|
-
|
62,402
|
-
|
35,363
|
|
|
|
|
|
|
13. Trade and other receivables
|
|
30 Sep 2024
|
30 Sep 2023
|
|
|
Group
|
Company
|
Group
|
Company
|
|
|
GBP
|
GBP
|
GBP
|
GBP
|
|
Other
receivables
|
8,948
|
8,948
|
9,421
|
9,421
|
|
Amounts due from
subsidiary
|
-
|
391,084
|
-
|
310,334
|
|
Prepayments
|
15,494
|
15,493
|
22,442
|
22,442
|
|
Total
|
24,442
|
415,525
|
31,863
|
342,197
|
Included within other receivables is amounts
receivable from CARU.
|
|
30 Sep 2024
|
30 Sep 2023
|
|
|
Group
|
Company
|
Group
|
Company
|
|
|
GBP
|
GBP
|
GBP
|
GBP
|
|
Amount receivable from CARU
(formerly BRUL)
|
-
|
411,667
|
-
|
326,667
|
|
Less: ECL provision
|
-
|
(20,583)
|
-
|
(16,333)
|
|
Total
|
-
|
391,084
|
-
|
310,334
|
In the current year the value of the receivable
was subject to 12 months ECL of 5%. The increase in the
provision expense is due to the charge of management fees from the
Company to its subsidiary CARU. As of the year end, the
amount that CARU owes the Company on management services was
£411,667 (2023: £326,667).
|
|
30 Sep 2024
|
30 Sep 2023
|
|
|
Group
|
Company
|
Group
|
Company
|
|
|
GBP
|
GBP
|
GBP
|
GBP
|
|
Brought forward ECL
provision
|
-
|
16,333
|
-
|
12,083
|
|
Provision expense
|
-
|
4,250
|
-
|
4,250
|
|
Carried forward ECL provision
|
-
|
20,583
|
-
|
16,333
|
14. Creditors: Amounts falling due within one
year
|
|
30 Sep 2024
|
30 Sep 2023
|
|
|
|
|
Restated
|
Restated
|
|
|
|
Group
|
Company
|
Group
|
Company
|
|
|
|
GBP
|
GBP
|
GBP
|
GBP
|
|
|
Trade payables
|
634,918
|
512,825
|
903,671
|
787,794
|
|
|
Ugandan taxes (note 8)
|
309,409
|
-
|
392,425
|
-
|
|
|
Accruals
|
76,048
|
76,048
|
39,159
|
39,159
|
|
|
Total
|
1,020,375
|
588,873
|
1,335,255
|
826,953
|
|
|
|
|
|
|
|
| |
Trade payables have been restated in the prior
year to recognise a creditor balance relating to exploration
expenditure costs for the period of £259,086 (note 2.1).
15. Creditors: Amounts falling after one
year
The Ugandan Mining Act 2003
requires an applicant for a mining lease to obtain surface rights
from landowners in the mineral area before the respective mining
lease can be granted. Accordingly, when the Group acquired its
subsidiary, it obtained surface rights by way of 49 years lease
over the area. The liability to the landowners is to be paid in 10
instalments on a section basis as the project progresses. The
progress on each section is not limited to any time frames and is
at the Group's discretion.
On 10 September 2022 the surface rights
agreement was revised and signed between the Locomo Communal Land
Association and Consolidated African Resources Limited, the surface
rights remain at 49 years. The liability to the land owners will be
paid in 8 instalments at defined dates, which are subject to
certain conditions being achieved with the final payment due in
2035.
|
|
30 Sep 2024
|
30 Sep 2023
|
|
|
GBP
|
GBP
|
|
Balance as at 1
October
|
818,915
|
978,255
|
|
Change in
estimate
|
148,468
|
-
|
|
Utilisation
|
-
|
(148,468)
|
|
Interest charged
during the period
|
44,987
|
45,748
|
|
Exchange
gain
|
(83,234)
|
(56,620)
|
|
Total payable as at 30
September
|
929,136
|
818,915
|
|
|
|
|
|
Analysis between current and non-current
liability
|
|
|
|
Payable within 12
months
|
134,953
|
-
|
|
Payable after 12
months
|
794,183
|
818,915
|
|
|
929,136
|
818,915
|
The value of the liability is measured at the
present value of the contractual payments due to the Land Owners'
Association over the lease term, with the discount rate of
5%.
At the statement of financial position date, the
Group undiscounted amount payable to the Land Owners is;
|
|
2024
|
2023
|
|
|
GBP
|
GBP
|
|
Payable within 1 years
|
134,953
|
-
|
|
Payable within 2-5
years
|
269,907
|
290,388
|
|
Payable after 5 years
|
809,720
|
871,164
|
|
|
1,214,580
|
1,161,552
|
16. Share capital
|
|
Number of shares issued
|
Nominal value per share
|
Share capital
|
Share premium
|
Total share capital
|
|
|
|
GBP
|
GBP
|
GBP
|
GBP
|
|
|
|
|
|
|
|
|
At 30 Sep 2022
|
177,929,950
|
|
1,181,316
|
7,480,829
|
8,662,145
|
|
|
|
|
|
|
|
|
Issue of Ordinary
shares
|
18,750,000
|
0.005
|
93,750
|
656,250
|
750,000
|
|
Issue of Ordinary
shares
|
12,700,000
|
0.005
|
63,500
|
571,500
|
635,000
|
|
Share issue costs
|
-
|
-
|
-
|
(71,180)
|
(71,180)
|
|
|
|
|
|
|
|
|
At 30 Sep 2023
|
209,379,950
|
0.005
|
1,338,566
|
8,637,399
|
9,975,965
|
|
|
|
|
|
|
|
|
Issue of Ordinary
shares
|
17,038,520
|
0.005
|
85,193
|
766,733
|
851,926
|
|
|
|
|
|
|
|
|
Share issue costs
|
-
|
-
|
-
|
(26,903)
|
(26,903)
|
|
|
|
|
|
|
|
|
At 30 Sep 2024
|
226,418,470
|
0.005
|
1,423,759
|
9,377,229
|
10,800,988
|
During the year ended 30 September 2024, the
Company issued the following shares;
|
Date
|
Number of Ordinary shares issued
|
Nominal share value
|
Share price
|
|
|
|
GBP
|
GBP
|
|
|
|
|
|
|
06 February 2024
|
7,847,000
|
0.005
|
0.0500
|
|
30 July 2024
|
9,191,520
|
0.005
|
0.0500
|
All of the shares issued are classed as ordinary
and have similar rights attached to them. No warrants were issued
in the current financial year.
As at 30 September 2024 the number of shares
issued and fully paid were 225,158,174 (2023: 209,344,950),
1,260,296 shares are unpaid at 30 September 2024 (2023: unpaid
shares 35,000).
17. Share based payments
Warrants
The following warrants were issued in exchange
for a good or service:
|
|
30 Sep 2024
|
30 Sep 2023
|
|
Warrants
|
Number warrants
|
Weighted average exercise
price
|
Number warrants
|
Weighted average exercise
price
|
|
|
|
|
|
|
|
Outstanding on 1 Oct
|
-
|
-
|
1,250,000
|
6.00p
|
|
Cancelled/ exercised
|
-
|
-
|
(1,250,000)
|
6.00p
|
|
Outstanding on 30 Sep
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
Weighted average remaining contractual
Life
|
-
|
|
0.57 years
|
The warrants have no vesting period and have
been recognised in full upon issue. If the warrants remain
unexercised after a period of three years from the date of grant,
they will expire. The holder may exercise the subscription right at
any time within the subscription period.
The above warrants were valued using the Black
Scholes valuation method. The assumptions used are detailed below.
The expected future volatility has been determined by reference to
the average volatility of similar
entities:
|
Warrants
|
|
30 Sep 2022
|
|
|
|
|
|
Weighted Average Share
Price
|
|
6.00p
|
|
Weighted Average Exercise
Price
|
|
6.00p
|
|
Expected Volatility
|
|
56%
|
|
Expected Life
|
|
3 years
|
|
Risk-free Rate
|
|
0.23%
|
|
Expected Dividend
|
|
Nil
|
|
Weighted Average Fair Value (GBP)
|
|
32,603
|
Options
The following options were issued in exchange
for a good or service:
|
|
30 Sep 2024
|
30 Sep 2023
|
|
Options
|
Number of options
|
Weighted average exercise
price
|
Number Options
|
Weighted average exercise
price
|
|
|
|
|
|
|
|
Outstanding on 01 Oct
|
21,000,000
|
5.76p
|
16,000,000
|
6.00p
|
|
Issued during the year
|
-
|
-
|
5,000,000
|
5.00p
|
|
Outstanding on 30 Sept
|
21,000,000
|
5.76p
|
21,000,000
|
5.76p
|
|
|
|
|
|
|
|
Weighted average remaining contractual
Life
|
|
2.17 years
|
|
3.23 years
|
The options issued prior to 1 October 2021 have
no vesting periods and have been recognised upon issue. If the
options remain unexercised after a period of five years from the
date of grant, they will expire. The share options cannot be
exercised if the holder has ceased employment.
The options issued in the prior year include a
market based vesting condition, the share options would only vest
if the share price of the Company trades in excess of 10p per share
for 10 consecutive days.
The above options were valued using the Black
Scholes valuation method, adjusted for the probability of meeting
the market-based vesting condition. The assumptions used for the
options granted in the prior period are detailed below. The
expected future volatility has been determined by reference to
the average volatility of similar entities during the
year:
|
Options
|
|
30 Sep
2023
|
|
|
|
|
|
Share Price
|
|
4.6p
|
|
Exercise Price
|
|
5.00p
|
|
Expected Volatility
|
|
67%
|
|
Expected Life
|
|
5 years
|
|
Risk-free Rate
|
|
3.47%
|
|
Expected Dividend
|
|
Nil
|
|
Fair Value (GBP)
|
|
26,194
|
Deferred
tax
No deferred tax asset has been recognised in
respect of share options and warrants due to the uncertainty of the
future trading profits.
18. Financial instruments
18.1 Categories of financial
instruments
|
|
30 Sep 2024
|
30 Sep 2023
|
|
|
Group
|
Company
|
Group
|
Company
|
|
|
GBP
|
GBP
|
GBP
|
GBP
|
|
Financial assets at amortised
cost
|
|
|
|
|
|
Trade and other
receivables
|
8,948
|
400,032
|
9,421
|
319,755
|
|
|
Cash and cash
equivalents
|
114,694
|
114,694
|
129,853
|
129,853
|
|
|
|
|
|
|
|
|
|
Financial liabilities at amortised
cost
|
|
|
|
|
|
|
Trade and other
payables
|
944,327
|
588,873
|
1,296,096
|
787,794
|
|
|
Surface
liability
|
929,136
|
-
|
818,915
|
-
|
|
|
|
|
|
|
|
|
| |
18.2 Financial risk management
objectives and policies
The Company's major financial
instruments include cash and cash equivalents, trade and other
payables and other receivables. The fair value of the Group's
financial instruments are equal to their carrying value. Details of
these financial instruments are disclosed in respective notes. The
risks associated with these financial instruments, and the policies
on how to mitigate these risks are set out below. Management
monitors these exposures to ensure appropriate measures are
implemented in a timely and effective manner.
Currency risk
The Group operates internationally
and is exposed to foreign exchange risk arising from various
currency exposures, primarily with respect to the United States
Dollar ("USD") Ugandan shilling ("UGX") and Australian Dollar
("AUD"). Foreign exchange risk arises from recognised
monetary assets and liabilities. The Group also exposes to
currency exposure, BRUL expenses are paid in both USD, UGX and AUD,
with the amount payable to the land owners denominated in
UGX.
The table below summaries the financial assets
and liabilities denominated in foreign currencies.
|
|
30 Sep 2024
|
|
30 Sep 2023
|
|
|
|
USD
|
UGX
|
AUD
|
USD
|
UGX
|
AUD
|
|
|
|
|
|
|
|
|
|
Financial assets
|
133
|
-
|
-
|
891
|
-
|
-
|
|
|
|
|
|
|
|
|
|
Financial liabilities
|
46,483
|
1,238,545
|
435,741
|
41,827
|
818,915
|
35,001
|
With all other variables held constant, the
effect on profit and loss had the GBP weakened or strengthened
against USD/UGX/AUD by 5% at the year end results in a (£17,796)
(2023: £27,782) change in value.
Credit risk
Credit risk arises on cash balances. The amount
of credit risk is equal to the amounts stated in the statements of
financial position for each of the assets (notes 12
& 13).
The Group's policy to manage this risk is to
deal with banks that are regulated entities. The Group's principal
banker, Barclays Bank PLC, is regulated by the United Kingdom
Financial Services Authority, and has a credit rating of A2 (2023:
A1).
Liquidity risk
Prudent liquidity risk management implies
maintaining sufficient cash and marketable securities and the
availability of funding through an adequate amount of committed
credit. The Company aims to maintain flexibility in
funding.
The maturity of the Company's financial
liabilities at the statement of financial position date, based on
the contracted undiscounted payments are disclosed in note 14 and
surface liability included in note 15, falls within one year and
payable on demand.
Capital risk
The Company defines capital as the total
equity of the Company. The Company's objectives when managing
capital are to safeguard the Company's ability to continue as a
going concern in order to provide returns for shareholders and
benefits for other stakeholders and to maintain an optimal capital
structure to reduce the cost of capital.
19. Related party transactions
Details of Directors 'remuneration are
disclosed in note 6.
Sam Quinn is a director and shareholder of the
Company and a Director of Lionshead Consultants Limited.
During the year, Lionshead Consultants Limited charged consultancy
fees of £42,000 (2023: £36,000).
20. Events after the year end
On 6 November 2024, the Group successfully
raised a total of £1,500,000 through the issue of 37,500,000 new
ordinary shares at 4 pence per share ("Fundraise"). The Fundraise
comprises a £1 million placing of 25,000,000 new ordinary shares
("Firm Placing") arranged through its broker Tavira Financial
("Tavira") and a conditional £500,000 subscription for 12,500,000
new ordinary shares from senior management ("Conditional
Subscription"). The Conditional Subscription was subject to FCA
approval of a Prospectus by the Company. Investors in the Fundraise
will be issued 1 warrant per 1 Placing Share ("Investor Warrants"),
exercisable at 6p for a 3-year period from Admission. Therefore,
the Company will issue an aggregate of 37,500,000 warrants, which
if fully exercised, would result in gross proceeds of £2.25 million
in additional funding. On 7 November the Board announced that the
retail offer for the issue of 2,946,890 new shares had closed and
raised £117,876.
On 26 November 2024, the Company published a
Prospectus for the issue of 37,711,260 New Ordinary Shares in
connection with the July and November Subscription and the issue of
Fee Shares to strategic partners of the Definitive Feasibility
Study. The Company made an application for the 37,711,260 New
Ordinary Shares to be admitted to trading on the Equity Shares on 2
December 2024 resulting in a total share capital and total voting
rights of 292,076,620. 10,700,000 new share options were issued to
the Directors.
On 9 December 2024, the Directors and Senior
Management gave notice that they had exercised 3,150,000 warrants
at 4 pence and raised £126,000. The Company made an application for
3,150,000 new ordinary shares resulting in a total issued share
capital and total voting rights of 295,226,620.
