Full Year Results
The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
31 October 2022
Technology Minerals Plc
("Technology Minerals", the "Company" or the "Group")
Full Year Results
Publication of Annual Report and Accounts
Technology Minerals Plc (LSE: TM1), the first listed UK company focused on creating a sustainable circular economy for battery metals, announces full year results for the 12-month period ended 30 June 2022.
Corporate
· Raised £1.5 million before expenses at admission to the London Stock Exchange in November 2021, which followed a pre-IPO fundraise that raised approximately £5 million
· Appointed James Cable as a Director and Chief Financial Officer ("CFO")
Mining
· Acquired 100% stake in Blackbird Creek, adding approximately 1,285 hectares to the Company's existing land position
· Completed sale of 10% interest in the Blackbird Creek and Emperium cobalt/copper US projects for £0.9 million, with the option to sell a further 20% for £1.8 million
· Received encouraging results from sampling survey at the Oacoma Project, US, which confirmed the presence of manganese and rare earth oxides ("REO")
· Received positive initial results from a due diligence sampling survey at the Asturmet Copper-Cobalt-Nickel ("Cu-Co-Ni") Project in Asturias, Spain
Recyclus Group Ltd ("Recyclus"), a 49% Technology Minerals owned company
· Battery recycling plants at Tipton (lead-acid) and Wolverhampton (lithium-ion) are progressing through the Environment Agency ("EA") licencing procedure
o Tipton plant awarded permit to allow treatment and processing of lead-acid batteries on-site - the permit is a key step to gaining final approval from EA
o Wolverhampton plant awarded EA permit that provides the critical legal foundation to receive the variation of licence required to be fully operational
o Plants expected to be fully operational within six months, subject to final EA approval
· Opened first laboratory suite at the Wolverhampton facility to conduct in-house testing for lead-acid and lithium-ion ("Li-ion") battery recycling processes
· Received three lithium battery testbed systems at the Wolverhampton facility, enabling the grading of batteries and access to the battery reuse market
· Partnered with Slicker Recycling Limited ("Slicker Recycling"), whereby Slicker Recycling will collect battery waste from around the UK and transport it to the closest Recyclus plant
· Partnered with WMG at University of Warwick - a leading academic group providing research, education and knowledge transfer in engineering, management, manufacturing and technology - and have agreed an engineering development partnership
Post-Period
· On 3 August 2022, Recyclus' 'Halo' battery boxes received UN-standard safety certification, opening a new revenue stream for Recyclus in domestic and international markets
· On 9 August 2022, the St Patrick licence was extended for three years at the Asturmet Cu-Co-Ni Project in Spain
· On 5 September 2022, Recyclus received ABTO status from the EA for its recycling site in Tipton, enabling Recyclus to immediately commence manual recycling operations at its lead-acid facility
· On 19 October 2022, the Company signed binding Heads of Terms to acquire the remaining issued share capital of Recyclus
Alex Stanbury, CEO of Technology Minerals said: "We are delighted to report our first set of full year results following our successful listing on the London Stock Exchange in November 2021 in what has been a landmark year for the Company.
"We made good progress with our mining assets focused on key battery metals to move them up the value curve, particularly in Ireland, Spain and the US. In addition, Recylcus, our 49% owned battery recycling company, has two UK battery recycling plants ready to come online, subject to final Environment Agency approval. The lead-acid and Li-ion battery recycling plants are the first two of a planned roll out of 10 plants over the coming years as we aim to expand our commercial footprint in the UK, Europe and the US.
"Earlier this month, we agreed to acquire the remaining share capital of Recyclus. We believe Recyclus is positioned to play a significant role in the industrial scale opportunity of recycling Li-ion and lead-acid batteries. Combining the two businesses will help us to advance our twin-track strategy to create a circular economy for battery metals through both the raw material supply, and the reprocessing and re-use of end-of-life batteries."
For further information please contact:
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Technology Minerals Plc |
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Robin Brundle, Executive Chairman Alex Stanbury, Chief Executive Officer |
+44 20 4582 3500 |
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Oberon Investments Limited |
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Nick Lovering, Adam Pollock |
+44 20 3179 0535 |
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Arden Partners Plc |
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Ruari McGirr, George Morgan |
+44 207 614 5900 |
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Gracechurch Group |
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Harry Chathli, Alexis Gore, William Dobinson |
+44 20 4582 3500 |
About Technology Minerals Plc
Technology Minerals is developing the UK's first listed, sustainable circular economy for battery metals, using cutting-edge technology to recycle, recover, and re-use battery technologies for a renewable energy future. Technology Minerals is focused on extracting raw materials required for Li-ion batteries, whilst solving the ecological issue of spent Li-ion batteries, by recycling them for re-use by battery manufacturers. With the increasing global demand for battery metals to supply electrification, the group will explore, mine, and recycle metals from spent batteries. Further information on Technology Minerals is available at www.technologyminerals.co.uk
OPERATIONAL REVIEW
It has been a year of progress for Technology Minerals with a successful IPO on the London Stock Exchange in November 2021. The Company has made significant steps in advancing its strategy to create a fully circular economy for battery metals including lithium, copper, cobalt, nickel and manganese. The Company has made good progress in advancing its exploration assets up the value chain, most notably with its projects in Spain and the USA. Meanwhile, the Company's 49%-owned battery recycling company, Recyclus, has made significant steps towards creating a national infrastructure for the recycling of lead-acid and Li-ion batteries at its Tipton and Wolverhampton plants and the launch of the Halo battery boxes, which enable safe transportation and storage of Li-ion batteries.
The Company's growth strategy is based on this twin-track approach of utilising the mining and recycling business to create a sustainable circular economy for battery metals through the extraction of key minerals and the recycling of lead-acid and Li-ion batteries.
Progressing mining assets up the value chain
The Company has a globally diverse portfolio of junior mining assets focused on the critical minerals essential to powering the transition to net-zero. These include cobalt, copper, nickel, manganese, and lithium, based at projects in the USA, Spain, Ireland and Cameroon.
The Company takes early-stage projects with potential to move them up the value curve through prudent deployment of capital to attract larger joint venture partners to fund the development of the projects. This strategy gives the Company the opportunity to add significant value to the Company's portfolio without taking on the more substantial costs associated with developing exploration assets.
The Company's exploration assets by location and resource:
|
Project |
Location |
Resource |
|
Asturmet |
Spain |
Nickel, Copper, Cobalt |
|
Blackbird Creek Property and Emperium |
USA |
Primary Cobalt |
|
NW Leinster Lithium |
Ireland |
Lithium |
|
Oacoma |
USA |
Manganese, Nickel, Cobalt, Rare Earth Oxides |
|
Technology Minerals Cameroon |
Cameroon |
Nickel Laterite, Cobalt |
The Asturmet Project, Spain
In March 2022, the Company was pleased to find that deposit characterisation sampling confirmed the presence of high-grade mineralisation of copper, cobalt and nickel at the underground Aramo Mine. Post-period, in August 2022, the St Patrick licence, on which the Aramo Mine Project is located, was extended for three years, extending the licence to June 2025, and field operations progressed further with 164 additional samples submitted for analysis. The Company is still conducting field programmes at the projects and are planning a more expansive exploration campaign, which will provide further understanding of the full potential of the project.
The Asturmet Project - based in the Principality of Asturias, north-west Spain - consists of seven exploration permits. One permit has been granted (St. Patrick), and the rest are currently under application. All permits are considered prospective for cobalt-nickel-copper mineralisation.
Blackbird and Emperium, Idaho, USA
In May 2022, the Company completed the sale of an initial 10% interest in its registered claims for the Blackbird and Emperium projects (collectively "the Properties"), for £900,000 to Bluebird Metals LLC ("the Buyer"). The sale agreement included a proposed option to sell a further 20% interest to the Buyer in the Properties for a further cash consideration of £1.8m exercisable within a six-month period from the signing date.
Technology Minerals' wholly-owned subsidiary, Techmin Limited, acquired 100% interest in the Blackbird Property, from DG Resource Management Ltd in March 2022. The acquisition added 158 contiguous lode claims, covering an area of approx. 1,285 ha to the Company's existing land position. The Blackbird Creek Property is situated in the Idaho Cobalt Belt - a 40-50km district characterised by copper-cobalt deposits. The primary exploration target is cobalt, though results from historical drilling and recent surface sampling indicate that there is potential to host significant cobalt-copper deposits.
The Emperium Project - held by Technology Minerals through its wholly-owned subsidiary, Emperium 1 Holdings Corp, covers approximately 55km² in east-central Idaho, making it one of the largest land positions in the renowned Idaho Cobalt Belt. To date, there has been limited exploration conducted on the property in the form of lithogeochemical (rock) sampling, and satellite image interpretation.
Oacoma, South Dakota, USA
The Oacoma Project is considered prospective for manganese and rare earth elements, as well as nickel, cobalt, copper, and in February 2022, the Company received encouraging results from 27 rock samples from the Oacoma site, which confirmed the presence of manganese and rare earth oxide mineral grades.
Technology Minerals Ltd ("TML") currently holds 15% of the Oacoma Project, and had the option to acquire up to a further 85% working interest on the terms of an exploration agreement that were to be agreed with North American Strategic Minerals Inc. Given this particular project is very early stage, and after reviewing the Company's entire project portfolio, the Board has taken the strategic decision to retain a 15% interest but will not be exercising its option to acquire a further 85% working interest in the project and has terminated its agreement with North American Strategic Minerals Inc.
Leinster, Ireland
The Leinster Property - located in the counties of Wicklow and Dublin, in the Republic of Ireland - is a lithium pegmatite project that consists of fifteen prospecting licence areas, covering approximately 477km². All the licences are currently owned by LRH Resources Limited - a wholly-owned subsidiary of Technology Minerals Plc.
Lithium mineralisation has been confirmed, with spodumene bearing samples from various prospects identified within the project area: Sorrel (1.66% Li2O equivalent); Tonygarrow (1.0% Li2O); Aghavannagh (1.78% Li2O).
Post-period, the Company announced in October 2022 that Global Battery Metals had exercised their first option to earn 17.5% equity by spending up to €85,000 in expenditures on the property, separately from the license fees and up to €6,500 in connection with license charges, fees and rents as were required to keep the Property in good standing by 12 October 2022.
The Company and GBML plan further work programmes on the Property in Q4 2022, with geological mapping, lithogeochemical sampling, ground surveying, deep overburden sampling and limited diamond drilling where warranted.
Cameroon
The Technology Minerals Cameroon ( " TMC " ) Property consists of five exploration permits in south-eastern Cameroon - at least three of which are considered prospective for nickel-cobalt rich laterite. Since applying for the permits in February 2021, TMC has performed a reconnaissance exploration on the five permit areas, which entailed geochemical evaluation, soil sampling, and lithogeochemical (rock) sampling. As announced in June 2022, the Company received five exploration permits at its site in south-eastern Cameroon and instructed its legal counsel to take steps to ensure that the permits will be valid under Cameroon law.
Creating a national capability for battery recycling in the UK and beyond
During the period, there was significant progress at Recyclus. Recyclus has developed proprietary technology to recycle Li-ion batteries and is now uniquely placed having created an industrial-scale solution and being first to market for the UK. The Company has an early-to-market advantage to service the growing requirements of the key industrial sectors, from aerospace, transport and automotive to energy and motorsport.
Two plants to come online
Recyclus has two battery recycling plants in Tipton and Wolverhampton. In May 2022, the plants were given an EA permit for the treatment and processing of lead-acid (Tipton) and Li-ion (Wolverhampton) batteries on-site. In addition, Recyclus was awarded with priority status from the EA, as it was satisfied that the development of the company will help maintain national resilience, national infrastructure and/or is critical for environmental protection. The plants are expected to come online and be fully operational within six months, subject to final clearance from the EA.
Tipton (lead-acid battery recycling plant)
The Tipton plant is designed to process up to 12 tonnes an hour of lead-acid batteries and is a fully automated system that is capable of recycling lead-acid batteries. The process breaks down the battery into separate constituent parts, to ensure it is fully recycled and recovers lead paste, acid, and plastic materials.
Post-period, in September 2022, Recyclus received Approved Battery Treatment Operator ("ABTO") status at the Tipton plant, granting approval to begin manual processing of lead-acid batteries at the site. Under ABTO status, Recyclus is authorised to produce up to 15,000MT per annum of lead and store up to 300MT of inbound stock at any one time on-site. This enabled phase one of production to begin, with the second phase set to begin once final approval is granted by the EA.
Wolverhampton (Li-ion battery recycling)
The opening of a new Li-ion recycling facility in Wolverhampton will be the first in the UK with the capacity to recycle Li-ion batteries on an industrial-scale. The company is targeting to expand its battery recycling volume from 8,300 tonnes in the first full year of production, to 41,500 tonnes by 2027.
In June 2022, Recyclus received three lithium battery testbed systems designed to measure a range of different battery chemistries of varying sizes at the Wolverhampton site. The testbed systems provide Recyclus with the operational capability to test the effective capacity of battery packs from a range of EV and industrial usages as well as for degradation or damage at the cell level.
By charging and discharging batteries to measure capacity and capture stored energy, it can also perform a number of other critical performance test criteria. The ability to discharge stored energy unlocks future opportunities to feed energy back into the national grid and for use on-site.
This testing capability enables Recyclus to grade batteries and access the reuse market for batteries alongside recycling. The tested battery packs will be sorted into one of three categories: the first are suitable for reuse as they are, the second are defective and need to be recycled, and the third are a split with some cells being retrievable and others not. It creates an opportunity for Recyclus to send suitable batteries back into alternative repurposed applications, depending on their condition and test results.
Slicker Recycling
In November 2021, Technology Minerals signed a partnership agreement with Slicker Recycling, one of the UK's leading hazardous waste management and service delivery providers, to collect battery waste from around the UK and safely transport it to the closest Recyclus plant. The agreement will help ramp up the recycling capacity for both lead-acid and Li-ion batteries. Once the two plants are fully operational, Recyclus believes this partnership can provide up to 40% of its lead-acid battery capacity, and up to 90% of its Li-ion capacity. Slicker Recycling has nine depots nationwide and executes more than 25,000 collections per annum.
Partnership with WMG
Recyclus agreed an engineering development partnership with WMG at the University of Warwick, a leading academic group providing research, education and knowledge transfer in engineering, management, manufacturing and technology.
Recyclus and WMG have been working together for over two years sharing expertise and developing the proprietary processes across the five key Li-ion battery chemistries. This partnership brings together WMG's world-class research programmes and Recyclus' leading battery recycling technology.
WMG and Recyclus have created an Engineering Doctorate focused on battery recycling technologies and a transfer of current and future applications. The EngD encompasses a four-year programme supporting talented individuals at varying career stages to develop new critical skill sets in this sector and will also focus on addressing contemporary industrial and technical challenges across the battery recycling sector.
According to a WMG report, by 2040 the UK automotive lithium-ion battery cell production alone will require 131,000 tonnes of cathodic metals. With the right infrastructure, recycling can supply 22% of this demand. This represents not only a positive environmental impact, but large savings for manufacturers, building the business case for increased battery recycling capabilities in the UK.
Halo Battery Recycling
In August 2022, Recyclus received UN-standard safety certification for its Halo battery boxes after they passed the rigorous safety standards. The ADR certification P911(1) is a requirement for transporting hazardous substances by road within Europe and confirmed Recyclus' ability to safely transport and store batteries. It highlights the importance of security and safety in the battery supply chain, especially with potentially hazardous Li-ion batteries.
This achievement paves the way for Recyclus to start marketing the boxes and the focus now is on driving sales both within the UK and internationally to scale revenues for the business unit. Discussions with potential customers have demonstrated the level of demand for the Halo boxes and Recyclus expects to see sales in 2022.
Events since the year end
In October 2022, the Company signed binding Heads of Terms agreement to acquire the remaining approximately 51% of shares in Recyclus not already owned. The transaction is subject to completion of due diligence and shareholder approval.
The acquisition strengthens Technology Minerals' balance sheet and provides early cashflow from recycling operations controlled by Technology Minerals. The combination of the two businesses offers a differentiated, IP protected exposure to battery processing, aligning the enlarged business with the energy transition taking place and the circular economy.
Financial Review
The Group has had an excellent financial year with strong progress being made in exploration and development on its battery metals mining licences and in respect of its key investment in the Recyclus Group. The Company successfully listed on the main board of the London Stock Exchange in November 2021, raising £1.6 million before expenses, with cash raised subsequently from the exercise of Warrants of £0.8 million. The IPO followed the amalgamation of several companies holding prime mining licences, which are included on the Group balance sheet at £18.3 million. In addition, the Company had previously raised approximately £5 million from pre-IPO funding. At the year end, the Group had cash of £0.4 million.
The Group is in an early pre-revenue stage of development in respect of its mining assets, and in the financial year has spent £1.0 million on exploration and evaluation, including £0.5 million in respect of the acquisition of the Blackbird Creek project in the USA. In May 2022, it sold a 10% stake in its Idaho assets for £900,000 a transaction which demonstrates the underlying strength and potential of its portfolio of assets. Corporate and other operating expenditure in the year amounted to £1.9 million and the consolidated loss for the financial year was £1.8 million.
The Group holds a 49% equity interest in the Recyclus Group which it acquired at nominal cost, and as of 30 June 2022 had lent it £4.5 million in order to fund the construction of its first Li-ion and lead battery recycling plants plus other costs, with loan repayments commencing in July 2022 as planned. The plants are ready to operate pending Environment Agency permitting and the Group anticipates that Recyclus Group will become cash generative in the short-term.
The Group proposes to continue its exploration and development work in the coming year on its mining licences to maximise their value potential, although proposed work will correspond with available cash resources.
Dividend
The Board is not in a position to propose a final dividend for the year.
Risks
The Company was incorporated recently, in 2021 and lacks a significant operating history, and therefore, investors have little basis on which to evaluate the Company's ability to achieve its objective of identifying, acquiring and operating one or more companies, businesses, prospects or assets.
In addition to the general risks laid out in the Annual Report, published today, the Directors feel that the Company has specific risks around the timing of the granting of the EA licenses for Recyclus's plants which could delay their commercial activity. Technology Minerals Cameroon Limited, a wholly owned subsidiary of the Company applied for five exploration permits in Cameroon. As announced on in June 2022, the Company received five exploration permits at its site in south-eastern Cameroon and instructed its legal counsel to take steps to ensure that the permits will be valid under Cameroon law.
Outlook
The successful listing on the London Stock Exchange, the funds raised, and subsequent strong progress in the period has provided the Company with an excellent platform to deliver on its growth plans.
The Company's focus is to increase recycling capacity for lead-acid and Li-ion batteries with two UK plants coming on stream within six months and it aims to build a total of 10 plants over the next five years. For the first time in the UK, there will be the capability to recycle the key materials from end-of-life Li-ion batteries on an industrial-scale using Recyclus' innovative technology.
In parallel, the Company is continuing to advance its exploration assets, focused on key battery metals, up the value curve in a capital light manner to attract major partners to inject development capital into the projects. The sale of 10% interest in the Blackbird and Emperium projects in May 2022 has already demonstrated the potential to add significant value into the Company through this strategy.
Through its twin-track approach of the extraction of metals and battery recycling, as well as the safe transportation and storage of Li-ion batteries, Technology Minerals is well-positioned for long-term sustainable growth as the Company aims to become a key contributor in the global transition to electrification.
Publication of Annual Report and Accounts
The Company's Annual Report and Accounts is being posted to shareholders and will be made available on the Company's investor relations website at: https://www.technologyminerals.co.uk/
Consolidated Statement of Comprehensive Income
For the period ended 30 June 2022
|
|
|
|
2022 |
|
Continuing operations |
Notes |
|
£000 |
|
|
|
|
|
|
IPO costs |
|
|
(146) |
|
Administrative expenses |
7 |
|
(1,734) |
|
Operating loss |
|
|
(1,880) |
|
Other income |
9 |
|
49 |
|
Net finance charges |
10 |
|
46 |
|
Loss before taxation |
|
|
(1,785) |
|
Income tax |
11 |
|
- |
|
Loss for the period |
|
|
(1,785) |
|
Attributable to: |
|
|
|
|
Equity holders of the Company |
|
|
(1,782) |
|
Non-controlling interests |
|
|
(3) |
|
|
|
|
(1,785) |
|
Other comprehensive income |
|
|
|
|
Items that may be subsequently reclassified to profit or loss: |
|
|
|
|
Exchange gains arising on translation of foreign operations |
|
|
30 |
|
Total comprehensive loss for the period |
|
|
(1,755) |
|
Attributable to: |
|
|
|
|
Equity holders of the Company |
|
|
(1,752) |
|
Non-controlling interests |
|
|
(3) |
|
Total comprehensive loss for the period |
|
|
(1,755) |
|
|
|
|
|
|
Loss per share: |
|
|
|
|
Basic and diluted earnings per share (pence) |
12 |
|
(0.23)p |
The accompanying notes form an integral part of this consolidated financial statements.
Consolidated Statement of Financial Position
As at 30 June 2022
|
|
|
|
2022 |
|
|
Notes |
|
£000 |
|
|
|
|
|
|
Non-current assets |
|
|
|
|
Property, plant and equipment |
13 |
|
5 |
|
Intangible assets |
14 |
|
18,300 |
|
Financial assets |
15 |
|
1,221 |
|
Loans to associates |
18 |
|
4,538 |
|
Total non-current assets |
|
|
24,064 |
|
|
|
|
|
|
Current assets |
|
|
|
|
Trade and other receivables |
19 |
|
67 |
|
Cash and cash equivalents |
20 |
|
371 |
|
Current assets |
|
|
438 |
|
Total assets |
|
|
24,502 |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
Trade and other payables |
21 |
|
602 |
|
Borrowings |
22 |
|
21 |
|
Total current liabilities |
|
|
623 |
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
Deferred tax liability |
23 |
|
2,891 |
|
Total non-current liabilities |
|
|
2,891 |
|
Total liabilities |
|
|
3,514 |
|
|
|
|
|
|
Net assets |
|
|
20,988 |
|
|
|
|
|
|
Equity |
|
|
|
|
Share Capital |
24 |
|
1,271 |
|
Share Premium |
24 |
|
19,770 |
|
Warrants reserve |
25 |
|
1,420 |
|
Foreign exchange reserve |
|
|
30 |
|
Accumulated deficit |
|
|
(1,529) |
|
Equity attributable to owners of the parent |
|
|
20,962 |
|
Non-controlling interests |
27 |
|
26 |
|
Total equity |
|
|
20,988 |
The accompanying notes form an integral part of this consolidated financial statements.
Consolidated Statement of Changes in Equity
For the period ended 30 June 2022
Attributable to equity holders of the Company
|
|
Share capital |
Share Premium |
Warrants reserve |
Foreign exchange reserve |
Accumulated deficit |
Equity |
Non-controlling interests |
Total Equity |
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
At incorporation on 9 June 2021 |
50 |
- |
- |
- |
- |
50 |
- |
50 |
|
|
|
|
|
|
|
|
|
|
|
Loss for the period |
- |
- |
- |
- |
(1,782) |
(1,782) |
(3) |
(1,785) |
|
Exchange gain on translation of foreign operations |
- |
- |
- |
30 |
(3) |
27 |
3 |
30 |
|
Total comprehensive loss for the period |
- |
- |
- |
30 |
(1,785) |
(1,755) |
- |
(1,755) |
|
|
|
|
|
|
|
|
|
|
|
Issue of share capital |
1,221 |
22,738 |
- |
- |
- |
23,959 |
- |
23,959 |
|
Share issue costs |
- |
(1,312) |
- |
- |
- |
(1,312) |
- |
(1,312) |
|
Warrants issued |
- |
(1,656) |
1,656 |
- |
- |
- |
- |
- |
|
Warrants exercised |
- |
- |
(236) |
- |
236 |
- |
- |
- |
|
Part disposal of subsidiary |
- |
- |
- |
- |
20 |
20 |
26 |
46 |
|
Balance at 30 June 2022 |
1,271 |
19,770 |
1,420 |
30 |
(1,529) |
20,962 |
26 |
20,988 |
The accompanying notes form an integral part of this consolidated financial statements.
Consolidated Statement of Cash Flows
For the period ended 30 June 2022
|
|
|
|
2022 |
|
|
Notes |
|
£000 |
|
Cash flows from operating activities |
|
|
|
|
Loss before taxation |
|
|
(1,785) |
|
Adjustments for: |
|
|
|
|
Depreciation |
13 |
|
3 |
|
Unrealised foreign exchange movements |
|
|
(4) |
|
Net cashflow before changes in working capital |
|
|
(1,786) |
|
|
|
|
|
|
Movement in receivables |
|
|
(21) |
|
Movement in payables |
|
|
423 |
|
Net cash (used in) operating activities |
|
|
(1,384) |
|
Cash flows from investing activities |
|
|
|
|
Acquisition of subsidiaries net of cash |
16 |
|
26 |
|
Purchase of property, plant and equipment |
13 |
|
(4) |
|
Exploration expenditure |
14 |
|
(892) |
|
Loan to associate |
18 |
|
(4,538) |
|
Proceeds from sale of investment in subsidiary |
|
|
860 |
|
Net cash used in investing activities |
|
|
(4,548) |
|
Cash flows from financing activities |
|
|
|
|
Issue of share capital |
|
|
1,550 |
|
Cost of issue of shares |
|
|
(430) |
|
Proceeds from exercise of warrants |
|
|
788 |
|
Proceeds of borrowing |
|
|
5,193 |
|
Cost of procuring convertible loan notes |
|
|
(798) |
|
Net cash generated from financing activities |
|
|
6,303 |
|
Net change in cash and cash equivalents during the period |
|
|
371 |
|
Cash at the beginning of period |
|
|
- |
|
Cash and cash equivalents at the end of the period |
|
|
371 |
The accompanying notes form an integral part of this consolidated financial statements.
Company Statement of Financial Position
As at 30 June 2022
|
|
Notes |
|
2022 |
|
|
|
|
£000 |
|
|
|
|
|
|
Non-current assets |
|
|
|
|
Property, plant and equipment |
13 |
|
2 |
|
Investment in subsidiaries |
16 |
|
14,905 |
|
Trade and other receivables |
19 |
|
1,504 |
|
Loans to associates |
18 |
|
4,538 |
|
Total non-current assets |
|
|
20,949 |
|
|
|
|
|
|
Current assets |
|
|
|
|
Trade and other receivables |
19 |
|
71 |
|
Cash and cash equivalents |
20 |
|
199 |
|
Current assets |
|
|
270 |
|
Total assets |
|
|
21,219 |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
Trade and other payables |
21 |
|
447 |
|
Total current liabilities |
|
|
447 |
|
|
|
|
|
|
Net assets |
|
|
20,772 |
|
|
|
|
|
|
Equity |
|
|
|
|
Share Capital |
24 |
|
1,271 |
|
Share Premium |
24 |
|
19,770 |
|
Warrants reserve |
25 |
|
1,420 |
|
Accumulated deficit |
|
|
(1,689) |
|
Total equity |
|
|
20,772 |
The Company profit and loss account has been approved by the Directors, and the use of the exemption under s408 of the Companies Act has been applied to publish an individual profit & loss statement.
Losses for the Company for the period ended 30 June 2022 were £1,925,000.
The accompanying notes form an integral part of the company financial statements.
Company Statement of Changes in Equity
For the period ended 30 June 2022
|
|
Share capital |
Share Premium |
Warrants reserve |
Accumulated deficit |
Total Equity |
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
|
At incorporation on 9 June 2021 |
50 |
- |
- |
- |
50 |
|
Loss for the period |
- |
- |
- |
(1,925) |
(1,925) |
|
Total comprehensive loss for the period |
- |
- |
- |
(1,925) |
(1,925) |
|
|
|
|
|
|
|
|
Issue of share capital |
1,221 |
22,738 |
- |
- |
23,959 |
|
Share issue costs |
- |
(1,312) |
- |
- |
(1,312) |
|
Warrants issued |
- |
(1,656) |
1,656 |
- |
- |
|
Warrants exercised |
- |
- |
(236) |
236 |
- |
|
Balance at 30 June 2022 |
1,271 |
19,770 |
1,420 |
(1,689) |
20,772 |
The accompanying notes form an integral part of the company financial statements.
Company Statement of Cash Flows
For the period ended 30 June 2022
|
|
|
|
2022 |
|
|
Notes |
|
£000 |
|
Cash flows from operating activities |
|
|
|
|
Loss before taxation |
|
|
(1,925) |
|
Adjustments for: |
|
|
|
|
Depreciation |
13 |
|
1 |
|
Impairment loss |
|
|
462 |
|
Gain on sale of investment in subsidiary |
|
|
(20) |
|
Net cashflow before changes in working capital |
|
|
(1,482) |
|
|
|
|
|
|
Movement in receivables |
|
|
(21) |
|
Movement in payables |
|
|
527 |
|
Net cash (used in) operating activities |
|
|
(976) |
|
Cash flows from investing activities |
|
|
|
|
Purchase of property plant and equipment |
13 |
|
(3) |
|
Acquisition of subsidiary |
16 |
|
(20) |
|
Loans to associates |
18 |
|
(4,538) |
|
Loans to subsidiaries |
19 |
|
(1,427) |
|
Proceeds from sale of investment in subsidiary |
|
|
860 |
|
Net cash used in investing activities |
|
|
(5,128) |
|
Cash flows from financing activities |
|
|
|
|
Issue of share capital |
24 |
|
1,550 |
|
Cost of issue of shares |
24 |
|
(430) |
|
Proceeds from exercise of warrants |
25 |
|
788 |
|
Proceeds of borrowing |
26 |
|
5,193 |
|
Cost of borrowing |
|
|
(798) |
|
Net cash generated from financing activities |
|
|
6,303 |
|
Net change in cash and cash equivalents during the period |
|
|
199 |
|
Cash at the beginning of period |
|
|
- |
|
Cash and cash equivalents at the end of the period |
20 |
|
199 |
|
|
|
|
|
The accompanying notes form an integral part of the company financial statements.
Notes to financial statements
1. General information
Technology Minerals Plc (the 'Company') is a public limited company incorporated and domiciled in England under the Companies Act with registration number 13446965. The Company is listed on the main market of the London Stock Exchange. The Company's registered office is Finsgate 5-7 Cranwood Street, London, England, EC1V 9EE.
2. Basis of preparation
The principal accounting policies, methods of computation and presentation used in the preparation of the consolidated financial information are shown below. The policies have been consistently applied to all the years presented, unless otherwise stated.
Financial year ending 30 June 2022 covers the periods from 9 June 2021 to 30 June 2022. As the Company was incorporated on 9 June 2021 and the Group formed on 17 November 2021, there is no comparison period reported.
Technology Minerals Plc's consolidated financial statements are presented in Pounds Sterling (£), which is also the functional currency of the parent company. All amounts are rounded to nearest thousand.
There have been no changes to the reported figures as a result of any new reporting standards or interpretations.
Basis of preparation
The Group's financial statements have been prepared in accordance with UK adopted international accounting standards (IFRSs) in conformity with the requirements of the Companies Act 2006 and in accordance with the requirements of the Companies Act 2006.
The consolidated financial statements have been prepared on the historical cost basis, except for the measurement to fair value of assets and financial instruments as described in the accounting policies below, and on a going concern basis.
Going Concern
On 18 November 2021 the Group obtained a Standard Listing on the LSE raising gross proceeds of £1.5 million before expenses. Subsequently, warrant exercises raised a further £0.8 million and the Group raised £0.9 million from the sale of a 10% interest in one of its mining assets. Additional plans are in place to raise further working capital and at the date of this report the Company is at an advanced stage in securing additional funding from new share placements and other sources of finance. The Company has lent Recyclus Group £4.5 million as at the balance sheet date and the first repayment under the loan agreement was received in July 2022 in accordance with the schedule.
The Directors have a reasonable expectation that the Company will be able to raise sufficient funds in order to meet planned expenditure for at least 12 months from the date of approval of these consolidated financial statements and therefore the consolidated financial statement have been prepared on a going concern basis.
The Board continues to monitor the impact of the Ukraine war on the ability of the Group to pursue its strategy and will make appropriate changes should they be required. There is not considered to be any material impacts on the financial position or results of the Group as a result of the Ukraine war at the reporting date.
Material Uncertainty
The Group's ability to continue as a going concern is reliant on raising additional finance. The Company is currently in an advanced stage in securing further funding from share placements and other sources of finance. In addition, the cashflow forecast includes loan repayments from Recyclus which are dependent on the granting of environmental agency permits and the achievement of the sales forecasts. These conditions, along with other matters set out above indicate a material uncertainty exists that may cast significant doubt on the group and the parent company's ability to continue as a going concern.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company its subsidiaries as if they formed a single entity. Subsidiaries are entities over which the Group has control. Control exists when the Company:
• has power over the investee; • is exposed, or has rights, to variable returns from its involvement with the investee; and • has the ability to use its power to affect its returns.
On acquisition, in the statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values. The results of acquired operations are included in the consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date on which control ceases. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the Group financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.
Investments in subsidiaries are accounted for at cost less impairment within the Company financial statements. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with those used by other members of the Group
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between the members of the Group are eliminated on consolidation.
Acquisitions and disposals of non-controlling interests in subsidiaries that do not result in a loss of control are accounted as transactions within equity. The difference between the fair value of the consideration paid or received and the amount by which the non-controlling interests are adjusted is recognised in equity and attributed to equity holders of the parent company.
3. New standards, amendments and interpretations adopted by the Company
The following IFRS or IFRIC interpretations were effective for the first time for the financial year beginning 9 June 2021. Their adoption has not had any material impact on the disclosures or on the amounts reported in this financial information:
|
Standards/interpretations |
Application |
Effective from |
|
IFRS 1 amendments |
First-time Adoption of International Financial Reporting Standards |
1 January 2022 |
|
IFRS 3 amendments |
Business Combinations |
1 January 2022 |
|
IAS 16 amendments |
Property, Plant and Equipment |
1 January 2022 |
|
IAS 37 amendments |
Provisions, Contingent Liabilities and Contingent Assets |
1 January 2022 |
|
IFRS 9 amendments |
Annual Improvements to IFRS Standards 2018-2020 (fees in the 10 percent test for derecognition of financial liabilities). |
1 January 2022 |
|
IAS 1 |
Presentation of Financial Statements |
1 January 2023 |
|
IFRS 17 |
Insurance Contracts |
1 January 2023 |
|
IAS 8 amendments |
Definition of accounting estimates |
1 January 2023 |
Financial instruments
Financial assets
The Company classifies its financial assets in the following measurement categories:
• those to be measured subsequently at fair value through profit or loss;
• those to be measured at amortised cost; and
• those to be measured at fair value through other comprehensive income (FVTOCI).
The classification depends on the business model for managing the financial assets and the contracted terms of the cash flows. Financial assets are classified as at amortised cost only if both of the following criteria are met:
• the asset is held within a business model whose objective is to collect contracted cash flows; and
• the contractual terms give rise to cash flows that are solely payments of principal and interest.
Financial assets, including trade and other receivables and cash and bank balances, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Such assets are subsequently carried at amortised cost using the effective interest method.
At the end of each reporting period, financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in the consolidated income statement.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been had the impairment not previously been recognised. The impairment reversal is recognised in the consolidated income statement.
Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.
On initial recognition, the Group may make an irrevocable election (on an instrument-by-instrument basis) to designate investments in equity instruments as at FVTOCI. Investments in equity instruments at FVTOCI are initially measured at fair value. Subsequently, they are measured at fair value with net changes in fair value recognised in other comprehensive income. Gains and losses on these financial assets are never recycled to profit or loss.
Financial liabilities
Basic financial liabilities, being trade and other payables, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires. The Company does not hold or issue derivative financial instruments.
Investment in subsidiaries
Investments in subsidiaries are initially measured as cost and reviewed for impairment at each reporting period. An investor controls an investee when the investor 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 the investee. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control is obtained up to the date that control ceases.
Intra-group balances and any unrealised gains, losses, income or expenses arising from intra-group transactions are eliminated in preparing the consolidated financial statements.
Investment in associates
Where the Group has the power to participate in (but not control) the financial and operating policy decisions of another entity, it is classified as an associate. Associates are initially recognised in the consolidated statement of financial position at cost. Subsequently associates are accounted for using the equity method, where the Group's share of post-acquisition profits and losses and other comprehensive income is recognised in the consolidated statement of profit and loss and other comprehensive income (except for losses in excess of the Group's investment in the associate unless there is an obligation to make good those losses).
Profits and losses arising on transactions between the Group and its associates are recognised only to the extent of unrelated investors' interests in the associate. The investor's share in the associate's profits and losses resulting from these transactions is eliminated against the carrying value of the associate.
Any premium paid for an associate above the fair value of the Group's share of the identifiable assets, liabilities and contingent liabilities acquired is capitalised and included in the carrying amount of the associate. Where there is objective evidence that the investment in an associate has been impaired the carrying amount of the investment is tested for impairment in the same way as other non-financial assets.
Foreign currency
Foreign currency transactions
Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the date of the consolidated statement of financial position are translated at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in profit or loss.
Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated at foreign exchange rates ruling at the dates the fair value was determined.
Financial statements of operations
The assets and liabilities of operations, including goodwill and fair value adjustments arising on consolidation, are translated to Pound Sterling at exchange rates ruling at the date of the consolidated statement of financial position. The revenues and expenses of operations are translated to Pound Sterling at rates approximating to the exchange rates ruling at the dates of the transactions. Foreign exchange differences arising on retranslation are recognised in other comprehensive income. They are reclassified to profit or loss upon disposal.
On disposal of a foreign operation, the cumulative exchange differences recognised in the foreign exchange reserve relating to that operation up to the date of disposal are reclassified to the profit or loss as part of the profit or loss on disposal.
Current and deferred income tax
Current income tax is calculated on the basis of the tax laws enacted or substantively enacted at the statement of financial position date in the country where the Company operates and generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial information. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the statement of financial position date and are expected to apply when the related deferred income tax asset is realised, or the deferred income tax liability is settled. Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised
Loss per share
The Group presents basic and diluted loss per share ("LPS") data for its ordinary shares. Basic LPS is calculated by dividing the profit or loss attributable to shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted LPS is determined by adjusting the profit or loss attributable to shareholders and the weighted average number of ordinary shares outstanding for the effects of all potentially dilutive ordinary shares, which could comprise warrants, share options and the conversion of loan notes into shares.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment.
Office equipment are depreciated straight line over 3 years.
Intangible assets
Intangible assets not acquired as part of a business combination are initially carried at cost. Intangible assets acquired as part of a business combination, and separately recognised from goodwill, are capitalised and measured at their fair value at the date of acquisition.
Exploration and evaluation costs
These comprise costs directly incurred in exploration and evaluation as well as the cost of mineral licences. Mineral evaluation and exploration costs which are capitalised as intangible assets include costs of licence acquisition, technical services and studies, exploration drilling and testing and appropriate technical and administrative. Exploration costs are capitalised as intangible assets pending the determination of the feasibility the commercial viability of the project.
When the decision is taken to develop a mine, the related intangible assets are transferred to property, plant and equipment and the exploration and evaluation costs are amortised over the estimated life of the project. Prior to reclassification to property, plant and equipment exploration and evaluation assets are assessed for impairment and any impairment loss recognised immediately in the statement of comprehensive income.
Where a project is abandoned or is determined not economically viable, the related costs are written off.
The recoverability of deferred exploration and evaluation costs is dependent upon a number of factors common to the natural resource sector. These include the extent to which the Company can establish mineral reserves on its properties, the ability of the Company to obtain necessary financing to complete the development of such reserves and future profitable production or proceeds from the disposition thereof.
Goodwill
Goodwill represents the excess of the cost of a business combination over the Group's interest in the fair value of identifiable assets, liabilities and contingent liabilities acquired.
Cost comprises the fair value of assets given, liabilities assumed, and equity instruments issued, plus the amount of any non-controlling interests in the acquiree plus, if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree. Contingent consideration is included in cost at its acquisition date fair value and, in the case of contingent consideration classified as a financial liability, remeasured subsequently through profit or loss.
Goodwill is capitalised as an intangible asset with any impairment in carrying value being charged to the consolidated statement of comprehensive income. Where the fair value of identifiable assets, liabilities and contingent liabilities exceed the fair value of consideration paid, the excess is credited in full to the consolidated statement of comprehensive income on the acquisition date.
Impairment of non-financial assets
The carrying amounts of the Group's assets are reviewed at the date of each consolidated statement of financial position to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated. Impairment is measured by comparing the carrying values of the asset with its recoverable amount. The recoverable amount of the asset is the higher of the assets' fair value less costs to sell and its value-in-use, which is measured by reference to discounted future cash flow.
An impairment loss is recognised in the income statement immediately.
When there is a change in the estimates used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in the income statement immediately, unless the asset is carried at its revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
Trade and other receivables
Trade and other receivables are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. The carrying amount of these assets approximates their fair value.
Trade and other payables
Trade and other payables are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.
Borrowings
Interest bearing debt facilities are initially recognised at fair value, net of directly attributable transaction costs. Transaction costs are recognised in the income statement on a straight-line basis over the term of the facility.
Equity instruments and reserves description
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received net of direct issue costs.
Ordinary shares are classified as equity and rank in full for all dividends or other distributions declared, made or paid on the ordinary share capital of the Company.
Share capital account represents the nominal value of the ordinary shares issued.
The share premium account represents premiums received on the initial issuing of the share capital. Any transaction costs associated with the issuing of shares are deducted from share premium, net of any related income tax benefits.
Warrant reserve represents equity-settled share-based payments made to third parties until such warrants are exercised.
Foreign exchange reserve represents:
· differences arising on the opening net assets retranslation at a closing rate that differs from opening rate; and
· differences arising from retranslating the income statement at exchange rates at the dates of transactions at average rates and assets and liabilities at the closing rate.
Retained earnings include all current and prior period results as disclosed in the Statement of Comprehensive Income.
Warrants
The Company estimates the fair value of the future liability relating to issued warrants using the Black-Scholes pricing model considering the terms and conditions upon which the warrants were issued.
Warrants relating to equity finance are recorded as a reduction of capital stock based on the fair value of the warrants.
Share-based payments
Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instrument at the grant date. Fair value is measured by use of Black-Scholes model. Where the value of the goods or services received in exchange for the share-based payment cannot be reliably estimated the fair value is measured by use of a Black-Scholes model.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of shares that will eventually vest.
Equity-settled share-based payment transactions with other parties are measured at the fair value of the goods and services received, except where the fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders the service.
All equity-settled share-based payments are ultimately recognised as an expense in the profit or loss with a corresponding credit to "Share-based payments reserve".
Upon exercise of share options, the proceeds received net of attributable transaction costs are credited to share capital, and where appropriate share premium. No adjustment is made to any expense recognised in prior periods if share options ultimately exercised are different to that estimated on vesting or if the share options vest but are not exercised.
When share options lapse or are forfeited the respective amount recognised in the Share-based payment reserve is reversed and credited to accumulated profit and loss reserve.
4. Financial risk
The following represent the key financial risks that the Company faces:
Financial risk factors
The Company's operations exposed it to a variety of financial risks that had included the effects of credit risk, liquidity risk and interest rate risk. The Company had in place a risk management programme that attempted to limit the adverse effects on the financial performance of the Company by monitoring levels of debt finance and the related finance costs. The Company did not use derivative financial instruments to manage interest rate costs and as such, no hedge accounting was applied.
Given the size of the Company, the Directors did not delegate the responsibility of monitoring financial risk management to a sub-committee of the Board. The policies set by the Board of Directors were implemented by the Company's finance department:
(a) Credit risk
The Company's credit risk was primarily attributable to its trade receivables balance. The amounts presented in the statement of financial position are net of allowances for impairment;
(b) Liquidity risk
Liquidity risk was the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The Company's financial liabilities included its trade and other payables shown in Note 21;
(c) Interest rate cash flow risk
The Company had interest-bearing assets. Interest bearing assets comprised cash balances and unsecured loans, which earned interest at floating rates.
Capital risk management
The Company monitors capital which comprises all components of equity (i.e., share capital, share premium and retained earnings/losses).
5. Critical accounting estimates and judgements
The preparation of the financial statements require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the end of the reporting period. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions.
Information about such judgements and estimates are contained in the accounting policies and/or the notes to the consolidated financial statements. Areas of judgement that have the most significant effect on the amounts recognised in the consolidated financial statements are as follows:
Valuation of warrants
The Company estimates the fair value of the future liability relating to issued warrants using the Black-Scholes pricing model taking into account the terms and conditions upon which the warrants were issued, if the warrant was granted on its own.
Warrants relating to equity finance are recorded as a reduction of capital stock based on the fair value of the warrants.
Loan to associate
Determination as to whether, the loan to associate is recoverable involves management estimates and judgement. Management uses discounted cashflow forecasts of the associate to determine whether an impairment of the loan is required. The Company has considered a range of sensitivities in respect of sales, cost of sales and discount rates and has assumed that the relevant environmental permits will be issued to enable the achievement of sales. The Company has concluded that there is considerable headroom over the carrying value of the loan.
Unquoted financial assets
The unquoted financial assets are held at fair value through other comprehensive income. Management determined that the fair value of these financial assets was their cost.
Impairment of exploration and evaluation costs
Determination as to whether, and by how much, an asset or cash generating unit is impaired involves management estimates. Management uses the following triggers to assess whether impairment has occurred (the list is not exhaustive):
• the period for which the entity has the right to explore in the specific area has expired during the period or will expire in the near future and is not expected to be renewed.
• substantive expenditure on further exploration for and evaluation of mineral resources in the specific area is neither budgeted nor planned.
• exploration for and evaluation of mineral resources in the specific area have not led to the discovery of commercially viable quantities of mineral resources and the entity has decided to discontinue such activities in the specific area.
• sufficient data exist to indicate that, although a development in the specific area is likely to proceed, the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full on successful development or by sale.
6. Business and geographical reporting
The Group's chief operating decision maker is considered to be the Executive Directors (the 'Executive Board'). The Executive Board evaluates the financial performance of the Group by reference to its mineral exploration and battery recycling activities - its reportable segments.
Below is a summary of the Group's results, assets and liabilities by reportable segment as presented to the Executive Board.
|
|
Mineral exploration |
Battery recycling |
Other |
Total |
|
|
£000 |
£000 |
£000 |
£000 |
|
Year ended 30 June 2022: |
|
|
|
|
|
Operating expenses |
(130) |
- |
(1,655) |
(1,785) |
|
Total segment operating loss |
(130) |
- |
(1,655) |
(1,785) |
|
|
|
|
|
|
|
Total segment assets |
|
|
|
|
|
At 30 June 2022 |
18,572 |
4,538 |
1,392 |
24,502 |
|
|
|
|
|
|
|
Total segment liabilities |
|
|
|
|
|
At 30 June 2022 |
(3,002) |
- |
(512) |
(3,514) |
7. Administrative expenses
|
|
|
2022 |
|
|
£000 |
|
|
Legal and professional fees |
|
816 |
|
Employee benefit expense |
|
443 |
|
Advertising and marketing |
|
341 |
|
Audit and Tax |
|
76 |
|
Depreciation |
|
3 |
|
Other administrative expenses |
|
55 |
|
|
|
1,734 |
Auditors' remuneration
|
|
|
2022 |
|
|
£000 |
|
|
|
|
|
|
Fees payable for the audit of the Group |
|
47 |
|
Fees payable for non-audit services - reporting accountant |
|
35 |
|
|
|
82 |
8. Employees and Directors
During the period key management personnel were the Directors of the Company
The average number of persons employed by the Company during the period (including Directors that receive remuneration) was 5.
The following table sets out the total employee and Director costs:
|
|
|
2022 |
|
|
£000 |
|
|
Director and consulting fees |
|
473 |
|
Wages and salaries |
|
18 |
|
Social security costs |
|
41 |
|
|
|
531 |
The following table sets out the Directors' remuneration costs:
|
|
Basic Salary/fees £'000 |
Pension £'000 |
Social Security £'000 |
Benefits £'000 |
Bonus £'000 |
Off-payroll £'000 |
Total £'000 |
|
Executive Directors |
|
|
|
|
|
|
|
|
Robin Brundle |
90 |
1 |
12 |
6 |
- |
- |
109 |
|
Alex Stanbury |
133 |
1 |
14 |
6 |
|
59 |
213 |
|
Nigel Ruddock |
34 |
- |
3 |
- |
- |
29 |
66 |
|
James Hannon |
- |
- |
- |
- |
- |
- |
- |
|
James Cable |
15 |
- |
1 |
- |
- |
- |
16 |
|
Lester Kemp |
40 |
1 |
5 |
- |
- |
- |
46 |
|
Wilson Robb |
34 |
- |
4 |
- |
- |
- |
38 |
|
Non-Executive Directors |
|
|
|
|
|
|
|
|
Philip Beard |
- |
- |
- |
- |
- |
12 |
12 |
|
Nicholas Kounoupias |
- |
- |
- |
- |
- |
12 |
12 |
|
Chang Oh Turkmani |
- |
- |
- |
- |
- |
- |
- |
|
Total |
346 |
3 |
39 |
12 |
- |
112 |
512 |
The highest paid Director during the period was Alex Stanbury receiving a total remuneration of £213,000.
9. Other income
|
|
|
2022 |
|
|
£000 |
|
|
|
|
|
|
Management fees |
|
45 |
|
Foreign exchange gain |
|
4 |
|
|
|
49 |
10. Net finance charges
|
|
|
2022 |
|
|
£000 |
|
|
|
|
|
|
Interest on loans |
|
46 |
|
|
|
46 |
11. Taxation
|
|
|
2022 |
|
|
£000 |
|
|
Current tax |
|
- |
|
Deferred tax |
|
- |
|
Total income tax expense |
|
- |
|
|
|
2022 |
|
|
£000 |
|
|
(Loss) for the period |
|
(1,785) |
|
(Loss) before income taxes |
|
(1,785) |
|
Tax using the Company's domestic tax rate 19% |
|
(339) |
|
Effect of non-deductible expenses |
|
2 |
|
Utilisation of tax losses |
|
- |
|
Differences in overseas tax rates |
|
2 |
|
Tax losses carried forward |
|
335 |
|
Total tax expense |
|
- |
Effective tax rate
The effective tax rate was 19% (2021: 19%). Tax charges are affected by the mix of profits and tax jurisdictions in which the Group operates. The impact of unrecognised tax losses and non-deductible items increases the Group's overall effective tax rate.
At the period end, the Group had estimated tax losses of £3,365,000 available for carry forward against future trading profits. As legislation has been enacted whereby the corporation tax rate is 25% from April 2023, the tax losses would have resulted in an additional deferred tax asset of £841,000 which has not been recognised in the financial statements due to the uncertainty of the recoverability of the amount.
12. Loss per share
Basic loss per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period.
|
|
|
2022 |
|
|
£000 |
|
|
Loss from continuing operations attributable to equity holders of the company |
|
(1,785) |
|
Weighted average number of ordinary shares in issue |
|
785,135,966 |
|
|
|
|
|
Basic and fully diluted loss per share from continuing operations in pence |
|
(0.23) |
13. Property, plant and equipment - Group
|
Cost |
|
Office equipment £000 |
Total £000 |
|
9 June 2021 |
|
- |
- |
|
Additions |
|
8 |
8 |
|
30 June 2022 |
|
8 |
8 |
|
Depreciation |
|
|
|
|
9 June 2021 |
|
- |
- |
|
Depreciation charge |
|
3 |
3 |
|
30 June 2022 |
|
3 |
3 |
|
|
|
|
|
|
Net book value 30 June 2022 |
|
5 |
5 |
Additions during the period include £4,000 of office equipment from the acquisition of Techmin Limited .
Property, plant and equipment - Company
|
Cost |
|
Office equipment £000 |
Total £000 |
|
9 June 2021 |
|
- |
- |
|
Additions |
|
3 |
3 |
|
30 June 2022 |
|
3 |
3 |
|
Depreciation |
|
|
|
|
9 June 2021 |
|
- |
- |
|
Depreciation charge |
|
1 |
1 |
|
30 June 2022 |
|
1 |
1 |
|
|
|
|
|
|
Net book value 30 June 2022 |
|
2 |
2 |
14. Intangible assets
|
Cost |
Mineral exploration £000 |
Goodwill £000 |
Total £000 |
|
9 June 2021 |
- |
- |
- |
|
Acquired through business combinations |
14,477 |
2,891 |
17,368 |
|
Additions |
1,746 |
- |
1,746 |
|
Disposals |
(814) |
- |
(814) |
|
30 June 2022 |
15,409 |
2,891 |
18,300 |
|
Accumulated amortisation |
|
|
|
|
9 June 2021 |
- |
- |
- |
|
Amortisation |
- |
- |
- |
|
30 June 2022 |
- |
- |
- |
|
|
|
|
|
|
Net book value 30 June 2022 |
15,409 |
2,891 |
18,300 |
See note 16 for further details on the mineral resource exploration projects acquired through the acquisition of Emperium, LRH Group, TML and OEL Group.
On 20 May 2022, the Company sold 10% interest in Emperium, for a cash consideration of £860,000. The difference between the cash consideration received and the reduction in intangible assets is recognised in retained earnings.
15. Financial assets
|
|
|
|
Group 2022 £000 |
Company 2022 £000 |
|
1 January 2021 |
|
|
- |
- |
|
Additions |
|
|
1,221 |
- |
|
30 June 2022 |
|
|
1,221 |
- |
The additions during the period were acquired as part of the acquisition of LRH Group and OEL see note 16 for further information.
16. Investment in subsidiaries
On 17 November 2021 the Company acquired 100% of the issued share capital of Emperium 1 Holdings Corporation (Emperium), LRH Resources Limited and its wholly owned subsidiary Asturmet Recursos S.L. (LRH Group), Techmin Limited (TML), Onshore Energy Limited (OEL) and its wholly owned subsidiary Technology Minerals Cameroon (TMC). The consideration to acquire each company except for TML was settled by the issuance of ordinary shares in the Company. See note 24 for further information.
On 20 May 2022, the Company sold 10% interest in Emperium, taking its ownership down to 90%.
Emperium is a company incorporated in the State of Nevada that owns mineral claims on approximately 13,900 acres in the United States in an area commonly known as the 'Idaho Cobalt Belt'.
LRH is a company incorporated in the Republic of Ireland and engages in mineral exploration, development and extraction and is primarily focused on Battery Metals. LRH owns a 100% interest in fifteen prospecting licences covering an area of approximately 477 sq. km in Ireland and a 100% interest in seven applications for exploration permits, one of which has been granted, in northern Spain.
OEL is a company incorporated in England that has applied for exploration permits covering an area of 2,456 square kilometres in Cameroon close to an area commonly known as the 'Nkamouna cobalt find'.
TML is a company incorporated in the England that has entered into option agreements to acquire mining claim rights covering an area of 3,175 acres in Idaho and a working interest in a mining project in South Dakota, United States.
The consideration paid and the fair value of the net assets acquired for each of the subsidiaries is as follows:
|
|
Emperium £000 |
LRH Group £000 |
TML £000 |
OEL £000 |
TMC £000 |
Total £000 |
|
Consideration paid in shares |
8,400 |
605 |
- |
6,720 |
- |
15,725 |
|
Consideration paid in cash |
- |
- |
20 |
- |
- |
20 |
|
Total Fair Value of Consideration |
8,400 |
605 |
20 |
6,720 |
- |
15,745 |
|
Identifiable assets and liabilities acquired |
|
|
|
|
|
|
|
Intangible assets |
258 |
262 |
140 |
- |
- |
660 |
|
Financial assets |
- |
3 |
- |
1,218 |
- |
1,221 |
|
Property, plant and equipment |
- |
- |
4 |
- |
- |
4 |
|
Trade and other receivables |
- |
- |
- |
140 |
1 |
141 |
|
Cash |
- |
8 |
37 |
1 |
- |
46 |
|
Trade and other payables |
- |
(22) |
(470) |
(312) |
- |
(804) |
|
Less carrying amount of mineral resource projects acquired |
258 |
251 |
(289) |
1,047 |
1 |
1,268 |
|
Fair value of mineral resource projects acquired |
8,142 |
354 |
309 |
5,673 |
(1) |
14,477 |
|
Deferred tax on mineral resource projects acquired: |
|
|
|
|
|
|
|
Location |
USA |
Ireland |
UK |
UK |
Cameroon |
- |
|
Tax rate |
21% |
12.5% |
19% |
19% |
33% |
- |
|
Deferred tax liability |
1,710 |
44 |
59 |
1,078 |
- |
2,891 |
|
Mineral resources project transferred to intangible assets |
9,852 |
398 |
368 |
6,751 |
(1) |
17,368 |
The carrying amounts of the mineral resource projects acquired was considered to be equal to their fair values. £46,000 of cash contributions were made by the subsidiaries acquired during the period.
Contribution of the acquisitions to operating, investing, and financing cashflows for the period are as follows:
|
Group |
|
|
2022 £000 |
|
Operating |
|
|
(394) |
|
Investing |
|
|
(913) |
|
Financing |
|
|
- |
|
Net decrease in cash and cash equivalents |
|
|
(1,307) |
Investment in subsidiaries - Company
|
|
|
|
Company £000 |
|
9 June 2021 |
|
|
- |
|
Additions |
|
|
15,745 |
|
Disposals |
|
|
(840) |
|
30 June 2022 |
|
|
14,905 |
During the period 10% of Emperium was sold for a cash consideration of £840,000.
As at 30 June 2022 the company held interests in the following subsidiary companies:
|
Company |
Country of registration |
Proportion held |
Nature of business |
|
Techmin Limited |
United Kingdom |
100% |
Mineral exploration |
|
Onshore Energy Limited |
United Kingdom |
100% |
Mineral exploration |
|
Emperium 1 Holdings Corporation |
USA |
80% |
Mineral exploration |
|
LRH Resources Ltd |
Ireland |
100% |
Mineral exploration |
|
Asturmet Recursos S.L. |
Spain |
100% |
Mineral exploration |
|
Technology Minerals Cameroon |
Cameroon |
100% |
Dormant |
17. Investment in associates
In September 2021 the Company acquired 49% of a battery-recycling business, Recyclus Group Ltd ('Recyclus') for nil consideration. Under the equity method the initial investment is recognised at cost being nil.
18. Loans to associates
During the period the Company provided an unsecured loan to Recyclus as follows:
|
£000 |
|
Group |
Company |
|
9 June 2021 |
|
- |
- |
|
Loans acquired |
|
2,909 |
2,909 |
|
Additions |
|
1,629 |
1,629 |
|
30 June 2022 |
|
4,538 |
4,538 |
Loans to associates generally bear 2% interest. The loan is repayable in monthly instalments from July 2022.
19. Trade and other receivables
|
|
|
|
Group 2022 £000 |
Company 2022 £000 |
|
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
Amounts receivable from subsidiary undertakings |
|
|
- |
1,504 |
|
|
|
|
- |
1,504 |
|
Current assets |
|
|
|
|
|
Other debtors |
|
|
15 |
15 |
|
VAT receivable |
|
|
23 |
27 |
|
Prepayments and accrued income |
|
|
29 |
29 |
|
|
|
|
67 |
71 |
The intercompany loan to Techmin Limited included in amounts receivable from subsidiary undertakings was impaired by £462,000 to £746,000 being the amount considered to be recoverable.
20. Cash and cash equivalent
|
|
|
|
Group 2022 £000 |
Company 2022 £000 |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
371 |
199 |
|
|
|
|
371 |
199 |
£46,000 of cash contributions were made by the subsidiaries acquired during the period. See note 16 for further information.
21. Trade and other payables
|
|
|
|
Group 2022 £000 |
Company 2022 £000 |
|
Trade and other payables |
|
|
449 |
310 |
|
Taxation and social security |
|
|
71 |
71 |
|
Accruals |
|
|
82 |
66 |
|
|
|
|
602 |
447 |
22. Borrowings
|
|
|
|
Group 2022 £000 |
Company 2022 £000 |
|
|
|
|
|
|
|
Amount owed to third parties |
|
|
21 |
- |
|
Total borrowings |
|
|
21 |
- |
23. Deferred tax liability
Deferred tax is calculated in full on temporary differences under the liability method.
|
|
|
|
Group 2022 £000 |
Company 2022 £000 |
|
|
|
|
|
|
|
At 1 January 2021 |
|
|
- |
- |
|
Arising on acquisition of mineral resource projects |
|
|
2,891 |
- |
|
At 30 June 2022 |
|
|
2,891 |
- |
24. Share capital and share premium
|
Group and Company |
Number of ordinary shares of 1p |
Share capital £000 |
Share premium £000 |
|
At 9 June 2021 |
50,000,000 |
50 |
- |
|
Share issue - placings |
66,666,667 |
66 |
1,433 |
|
Share issue - deal consideration |
807,252,571 |
807 |
15,391 |
|
Share issue - conversion of CLNs |
306,229,366 |
306 |
4,887 |
|
Share issue - introduction fees |
3,733,333 |
4 |
80 |
|
Share issue - warrants exercised |
29,813,941 |
30 |
758 |
|
Share issue - in lieu of services provided |
7,727,715 |
8 |
189 |
|
Share issue - costs |
- |
- |
(1,312) |
|
Fair value of share warrants issued |
- |
- |
(1,656) |
|
At 30 June 2022 |
1,271,423,593 |
1,271 |
19,770 |
The history of the Company's share capital is as follows:
On incorporation
50,000,000 Ordinary Shares of £0.001 each of which 49,999,999 Ordinary Shares were issued to Century Cobalt Corp. and 1 to Alexander Stanbury, who holds his share as nominee for Century Cobalt Corp.
Share placing - 17 November 2021
Placing of 66,666,667 Ordinary Shares of £0.001 at a price of £0.0225 (Placing Price) per Ordinary Share raising £1,500,000 before issue costs.
Deal consideration paid
17 November 2021
420,000,000 Ordinary Shares of £0.001 at a price of £0.02 per Ordinary Share were issued for a total consideration of £8,400,000 to acquire 100% of Emperium.
336,000,000 Ordinary Shares of £0.001 at a price of £0.02 per Ordinary Share were issued for a total consideration of £6,720,000 to acquire 100% of OEL.
30,239,131 Ordinary Shares of £0.001 at a price of £0.02 per Ordinary Share were issued for a total consideration of £604,783 to acquire 100% of LRH.
16 March 2022
21,013,440 Ordinary Shares at a price of £0.02 per Ordinary Share were issued for a total consideration of £472,499 to acquire 100% Blackbird Creek Property.
Conversion of CLNs - 17 November 2021
Refer to note 26.
Introduction fees - 17 November 2021
£84,000 was paid by way of issuance of 3,733,333 Ordinary Shares of £0.001 at a price of £0.0225 per Ordinary Share to League of Angels for introduction fees.
Warrants exercised - 21 February 2022
23,147,274 warrants were exercised to acquire 23,147,274 ordinary shares at a price of £0.03375 per share.
6,666,667 warrants were exercised to acquire 6,666,667 ordinary shares at a price of 0.1p per share.
Share issue in lieu of services provided
24 March 2022
1,333,333 ordinary shares issued at a price of £0.0225 per share to United Capital Investments London Limited in settlement of a payment due to UCI for the Company's wholly-owned subsidiary, Onshore Energy Limited.
2,222,222 ordinary shares issued at a price of £0.0225 per share to UCI in settlement of a payment due from the Company to PAI Capital Ltd.
2,436,104 ordinary shares issued at a price of £0.0278 per share to Aurum Exploration Limited in settlement of payment due to Aurum for work carried out by Aurum for the Company's wholly-owned subsidiary, LRH Limited.
10 June 2022
603,981 ordinary shares issued at a price of £0.0314 per share to North American Strategic Metals Inc. in settlement of payment due to NASM.
1,132,075 ordinary shares issued at a price of £0.0265 per share to a supplier for the provision of consultancy services.
25. Warrants
CLN Warrants
Warrants were issued to the holders of the Convertible Loan Notes (CLN Warrants),that will give them the right to within 2 years from Admission to subscribe for one Ordinary Share in Technology Minerals for each Ordinary Share issued to the loan note holder on conversion of the loan note at Admission, at the Placing Price x 150%.
Placee Warrants
Each placee of the £1.5m share placing will have the right to subscribe for one Ordinary Share in Technology Minerals for each placing share issued to the placee at the Placing Price x 150% exercisable within 2 years from Admission.
Advisor Warrants
Warrants were issued to the Company's advisors that will give them the right to within 2 years from Admission to subscribe for Ordinary Shares in Technology Minerals at exercise prices of £0.03375 and £0.001.
The fair value of the warrants issued during the period was calculated using the Black-Scholes mode using the following information:
|
|
CLN Warrants |
Placee and advisor Warrants |
Advisor Warrants |
|
Number of shares that could be acquired on the exercise of the warrant |
306,229,366 |
72,955,554 |
7,333,334 |
|
Fair value of one CLN Warrant |
£0.003937 |
£0.00401 |
£0.02151 |
|
Warrant Share exercise price |
£0.03375 |
£0.03375 |
£0.001 |
|
Date of grant |
29/07/2021 |
17/11/2021 |
17/11/2021 |
|
Time to maturity, years |
2 |
2 |
2 |
|
Share price |
£0.0225 |
£0.0225 |
£0.0225 |
|
Expected volatility*,% |
55% |
55% |
55% |
|
Expected dividend growth rate,% |
0% |
0% |
0% |
|
Risk-free interest rate (3 year bond),% |
0.076% |
0.56% |
0.56% |
*Calculation of volatility involves significant judgement by the Directors due to the absence of the historical trading data for the Company at the date of the grant.
The fair value of the warrants is £1,656,199 and has been charged to Share premium. See note 24.
At 30 June 2022, the Company had outstanding warrants to subscribe for Ordinary shares as follows:
|
Warrant exercise price |
Expiry date |
Fair value of individual warrant |
At 01/07/2021 |
Issued |
Exercised |
At 30/06/2022 |
|
£0.03375 |
29/07/2023 |
£0.003937 |
- |
306,229,366 |
|
306,229,366 |
|
£0.03375 |
17/11/2023 |
£0.00401 |
- |
72,955,554 |
(23,147,274) |
49,808,280 |
|
£0.001 |
17/11/2023 |
£0.02151 |
- |
7,333,334 |
(6,666,667) |
666,667 |
|
|
|
|
- |
386,518,254 |
(29,813,941) |
356,704,313 |
26. Convertible loan notes
On 29 July 2021 the Company issued convertible loan notes in 3 tranches: Series A, Series B and Series C. The Series A and Series B CLNs were originally issued by Techmin Limited and on 29 July 2021 the Company assumed all of Techmin Limited's obligations.
The Company raised a total of £5,192,800 before costs.
On 17 November the CLNs were converted into the Ordinary Shares of the Company as follows:
|
CLN Series |
Amount borrowed £ |
Discount to Placing Price % |
Issue price per Ordinary Share £ |
Number of Ordinary shares issued on conversion |
|
Series A |
1,762,800 |
30% |
0.0158 |
111,923,810 |
|
Series A |
292,500 |
35% |
0.0146 |
20,000,000 |
|
Series B |
2,137,500 |
20% |
0.0180 |
118,750,000 |
|
Series C |
1,000,000 |
20% |
0.0180 |
55,555,556 |
|
Total |
5,192,800 |
|
|
306,229,366 |
27. Non-controlling interests
Non-controlling interests that are material to the Group are reflected in the table below.
On 20 May 2022 Technology Minerals Plc sold 10% interest in its wholly owned subsidiary Emperium Ltd, a US cobalt/copper projects: the Blackbird Creek Project and Emperium Project (collectively "the Properties"), to Bluebird Metals LLC, taking its ownership down to 90%. The consideration received for the 10% disposal was £860,000.
Summarised below is the financial information for Emperium Ltd, before intragroup eliminations together with amounts attributable to NCI:
|
|
|
|
2022 £000 |
|
|
Non-current assets |
|
|
376 |
|
|
Current assets |
|
|
- |
|
|
Non-current liabilities |
|
|
- |
|
|
Current liabilities |
|
|
(119) |
|
|
Net assets |
|
|
257 |
|
|
Attributable to owners of the parent |
|
|
231 |
|
|
Attributable to non-controlling interests |
|
|
26 |
|
|
Attributable to non-controlling interests |
|
|
2022 £000 |
|
Loss for the year |
|
|
(3) |
|
|
|
|
|
|
Net (decrease)/increase in cash and cash equivalents |
|
|
- |
28. Financial risk management
The Group's activities expose it to a variety of financial risks which result from its operating and investing activities; market risk (foreign currency exchange risk), liquidity risk, capital risk and credit risk. These risks are mitigated wherever possible by the Group's financial management policies and practices described below. The Group's financial risk management is carried out by the finance team led by the Chief Financial Officer and under policies approved by the Board. Group finance identifies, evaluates and mitigates financial risks in close co-operation with the Group's senior management team.
Financial instruments by category
|
Group |
Group 2022 £000 |
Company 2022 £000 |
|
Financial assets at amortised costs: |
|
|
|
Trade and other receivables |
67 |
71 |
|
Cash |
371 |
199 |
|
Loan receivable |
4,538 |
4,538 |
|
Financial liabilities at amortised costs: |
|
|
|
Trade and other payables |
602 |
447 |
|
Borrowings |
21 |
- |
|
Financial assets at fair value through other comprehensive income: |
|
|
|
Financial assets |
1,221 |
- |
Investments in equity instruments at FVTOCI are measured at cost, which is considered to be equal to their fair values.
Capital risk
The Group's objectives when managing capital are:
· to safeguard the Group's ability to continue as a going concern, so that it continues to provide returns and benefits for shareholders;
· to support the Group's growth; and
· to provide capital for the purpose of strengthening the Group's risk management capability
The Group actively and regularly reviews and manages its capital structure to ensure an optimal capital structure and equity holder returns, taking into consideration the future capital requirements of the Group and capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital expenditures and projected strategic investment opportunities. Management regards total equity as capital and reserves, for capital management purposes. The Group is not subject to externally imposed capital requirements.
Credit risk
Credit risk refers to the risk that the Group's financial assets will be impaired by the default of a third party (being non-payment within the agreed credit terms). The Group is exposed to credit risk primarily on its cash and cash equivalent balances as set out in note 20 and on its trade and other receivable balances as set out in note 19. The Group's credit risk is primarily attributable to its other receivables, being royalty receivables. It is the policy of the Group to present the amounts in the balance sheet net of allowances for doubtful receivables, estimated by the Group's management based on prior experience and the current economic environment. In certain cases, the Group has the right to audit the reported royalty income.
For banks and financial institutions, only parties with a minimum credit rating of BBB are accepted. The majority of cash is held with Revolut Limited in the UK.
The Directors have considered the credit exposures and do not consider that they pose a material risk at the present time. The credit risk for cash and cash equivalents is managed by ensuring that all surplus funds are deposited only with financial institutions with high quality credit ratings. There are currently no expected credit losses.
Liquidity risk
Liquidity risk relates to the ability of the Group to meet future obligations and financial liabilities as and when they fall due. The Group currently has sufficient cash resources to pay the trade and other payables and contingent consideration when they fall due.
|
Future expected payments |
|
|
|
Group |
|
2022 £000 |
|
Trade and other payables within one year |
|
602 |
|
Current tax liabilities within one year |
|
- |
Foreign exchange risk
The Group is exposed to foreign exchange risk arising from currency exposures, primarily with respect to the United States Dollar (USD) and the Euro.
The following table highlights the major currencies the Group operates in and the movements against the Great British Pound (GBP) during the course of the year:
|
|
Average rate |
Reporting spot rate |
||||
|
|
2022 |
2021 |
Movement |
2022 |
2021 |
Movement |
|
United States Dollar |
1.32 |
1.35 |
(0.03) |
1.22 |
1.38 |
(0.16) |
|
Euro |
1.18 |
1.13 |
0.05 |
1.16 |
1.17 |
(0.01) |
The Group's exposure to foreign currency risk based on GBP equivalent carrying amounts of monetary items at the reported date:
|
|
|
2022 2022 £000 £000 |
||
|
|
|
|
USD |
EUR |
|
Cash and cash equivalents |
|
|
- |
20 |
|
Trade and other receivables |
|
|
- |
1 |
|
Trade and other payables |
|
|
(8) |
(105) |
|
Net exposure |
|
|
(8) |
(84) |
The Group does not hedge against foreign exchange movements.
Exchange rate sensitivity
The Group is mainly exposed to foreign exchange risk on the cash balances and trade and other payables denominated in currencies other than GBP as detailed above. A +/- 10% change in the GBP:EUR and GBP:USD rate and the impact of a +/- 10% change on the exchange rates on the translation of foreign subsidiaries into the Group's presentation currency would result in the following changes:
|
|
|
|
2022 £000 |
2022 £000 |
|
|
|
|
Profit/(loss) +10%/-10% |
Equity +10%/-10% |
|
USD |
|
|
(1) / 1 |
28 / (28) |
|
EUR |
|
|
(26) / 26 |
26 / (26) |
29. Related party transactions
Base salaries paid to the Executive Directors for the year ended 30 June 2022 was £358k. See note 8 for further details.
The amounts paid to the Non-Executive Directors for services for the year ended 30 June 2022 was £24k.
During the year an introductory fee of 5% was paid, in shares, to PAI.Capital Ltd. as a result of the convertible loan note issued to Kafina Investments LLC in return for £1,000,000. Alexander Stanbury, Robin Brundle and Philip Beard were advisers to PAI.Capital Ltd at the time the note was issued but are no longer advisors to PAI.Capital Ltd.
During the year the Company provided a loan of £4.5m to Recyclus Group, an associate. Alex Stanbury is also a Director of Recyclus Group Limited. The interest charged on the loan is 2% per annum and the amount charged for the period was £46,000. See note 17 and 18 for further information.
During the year Technology Minerals Plc sold 10% interest in its wholly owned US Blackbird Creek Project and Emperium Project to Bluebird Metals LLC. The beneficial owner is a Non-Executive Director of Technology Minerals Plc. See note 27 for further information.
During the period the Company charged £140,000 for the provision of management services to its subsidiaries.
During the period the Company provided £1,504,000 of loans to its subsidiaries. The interest charged on the loans was 2% per annum and the amount charged for the period was £20,000. See note 19.
As at 30 June 2022 amounts receivable from subsidiary undertaking was as follows:
|
Company |
|
2022 £000 |
|
Techmin Limited |
|
746 |
|
Onshore Energy Limited |
|
170 |
|
Emperium 1 Holdings Corporation |
|
119 |
|
LRH Resources Ltd |
|
225 |
|
Asturmet Recursos S.L. |
|
244 |
|
|
|
1,504 |
30. Notes supporting statement of cashflows
Significant non-cash transactions from investing activities are as follows:
|
|
|
2022 £000 |
|
Equity consideration for the acquisition of subsidiaries |
|
15,725 |
|
Equity consideration for the acquisition of mineral resources project |
|
473 |
|
Shares issued in lieu of services provided by third parties |
|
269 |
See notes 16 and 24 for further information
Significant non-cash transactions from financing activities are as follows:
|
|
|
2022 £000 |
|
Conversion of loan notes to equity |
|
5,193 |
See note 26 for further information.
31. Events occurring after the reporting date
On 9 August 2022, the St Patrick licence was extended for three years at the Asturmet Cu-Co-Ni Project in Spain.
In October 2022, the Company signed binding Heads of Terms ("HoTs") agreement to acquire the remaining approximately 51% of shares not already held in Recyclus. The transaction is subject to completion of due diligence and shareholder approval.
32. Ultimate Controlling Party
The company does not have a single controlling party.
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